I see you've been given a lot of great advice. Aurora is right that it is important to try to find a counselor who works on a sliding scale. In addition to clinics, sometimes private therapists will work on a sliding scale basis. You just need to call around.
And Sandy is right. I used to work in insurance and there is absolutely no one who will pay out if you take your own life. Many insurers won't even cover someone with depression but in any case there will be no pay out if you are responsible for your own death -- in fact, a lot of policies won't even pay out if you fail to take reasonable preventative actions to keep an illness from becoming fatal. So put that thought out of your head b/c it will not benefit anyone.
Have you talked with a bankruptcy attorney? I am in the process now & while it is quite unpleasant it is not nearly as awful as I expected. During my required pre-filing classes I learned that I can actually get my credit back on track faster by declaring bankruptcy than by continuing to try to pay what I can. And as soon as you file -- whether it's Chapter 7 liquidation or Chapter 13 reorganization, they MUST stop calling you by law. Learning to deal with stress is important, but sometimes we need to work to try to eliminate some stress as well. Bankruptcy might be a way to do that. Consultations are usually free (call & ask). You can find court-approved attorneys from your local bankruptcy court. Here's a link to the US Bankruptcy Courts website: www.uscourts.gov/FederalCourts/Bankruptcy.aspx
I agree with the others that you need to get out of the drug addict's home. That is going to become an increasingly unsafe place for you. She will steal more & more money and become increasingly violent as she needs more drugs and can't get her hands on enough money to buy them. Call Child Protective Services & file a report. They take claims filed by an adult living in the same home quite seriously & are very likely to investigate (no guarantees, but you're the children's best bet). You can also contact your local city representative (councilman or alderman) for help getting the police involved with a drug investigation. I am helping a friend of mine right now get help with her crack addiction & the one thing I hear over and over at CA meetings is that most of them were only clean b/c they went to prison & had to get clean. They tried everything else but prison was when they finally hit rock bottom. So you might consider involving the police as well so that she can get clean & have some time to really think about
the changes she needs to make to her life.
There really isn't anywhere that you can hide your money in the house where she won't find it. Addicts are very persistent & she will find it no matter how well you hide it. The only place where you will be safe is another home. The only place where the children will be safe until their mother gets clean is in another home (if you think the dealers won't use the children to try to shake down their mother for money, you're wrong). And the only place your friend will be safe is in rehab or jail. It's taken me a long time to realize that but it is true.
I do know what it's like to feel totally overwhelmed by things. I am in 2 lawsuits right now, losing my home, looking for work, no decent insurance, can't get insurance b/c one doctor one time said that there were 4 reasons why I might not be sleeping & one of them was diabetes -- I couldn't afford the test at the time, so now I'm ineligible until I can prove I don't have it; even though I can sleep fine now. So when I run out of the medication I currently have, it will be tough. But I did find out that some manufacturers will provide up to 12 months worth of free medication to patients without insurance so I can get some of what I need that way. Maybe that would be an option for you. My counselor (who works on a sliding scale) has been really helpful at helping me identify resources so I really think that could be a good start to help you get things in order.
And then it's just a heck of a lot of work. Right now I am fighting an uphill battle but there are days where I can see that I am making progress. I have a financial plan now & am better at asking for help when I can't pay for necessities. No more groceries on the credit card. I go to food pantries now. If I can't afford the doctor, I either wait, try to self-treat, or go to the cheap clinic. People can be depressing there so I bring some headphones (I got a USB drive with headphones that plays music from Target for $10. Best money I've ever spent :).
There are some cheap options usually on Craig's List (be sure to very, very carefully screen potential roommies). I've found postings for 2BR/2BA shared among 4 people & the rent was $175/month in my area. Usually areas around community colleges seem to be cheapest b/c people don't have much money but want to have some independence from their family. If you can't even afford that, you could see if Housing and Urban Development (HUD) is accepting applications in your area for subsidized housing. In some areas, the waiting list is so long they aren't accepting new applicants but it's worth checking into. Otherwise, maybe try contacting a local church or synagogue or Salvation Army or Red Cross to see if they can help you out with housing, or can refer you to someone who can. Many areas do have agencies that will help people out with housing if they agree to go to classes to learn money management & tips to get back on their feet (which tend to be helpful anyways). Typically they will help out for 6-18 months.
Go to food pantries for most of your food to free up that money for rent. Try to see if you can pick up an extra job, or extra hours, now that we're headed into the holiday season. There are a lot of temporary jobs that might help you get enough money together to file bankruptcy, pay down debt, set up a savings account, or whatever your primary financial goal might be right now.
Things do get better, though. I have to keep telling myself that. It is so easy to get depressed about
things & to believe that they will never get better, but things can improve. After 2 years of sickness & misery & financial ruin, I am finally nearing the end of the miserable part and then can move on to the good part of life. I am getting out of a home I've hated anyways, have paid down enough of my debt that I feel like I CAN do this, have gotten well enough to do more physical jobs, set up a budget, and now have a plan to get back into teaching (which I miss) and to take some graduate classes that will qualify me for better pay & more job opportunities.
I need to start by volunteering in a friend's classroom & then she has said she will serve as a reference for me to get substitute teaching jobs. Once I get sub jobs, it will be easier to convince schools to offer me a permanent position, which will be very possible by next school year. I am applying for small scholarships to cover the cost of the 6 classes & have also applied for holiday jobs at retail stores to help cover the cost of books.
So it is do-able. It just takes a lot of energy & effort. More than we have on our own usually. Counselors, friends, people from church or civic groups we belong to, and charities are there for times like this. To make sure that good people like you can get help in the short-term & be able to do great things with your life in the long-term.
Hang in there!!!