N.K.
Wow, staying with someone because he threatened self-harm is a bad way to live, no wonder you resent him, you feel you have been threatened to stay in this marriage. It's like being held hostage. Is he willing to attend marriage counseling? He definitely needs to see a therapist for his depression, manipulation, and his feeling that he is too good to work, independent from a marriage counselor. That is ridiculous and unrealistic, not to mention, irresponsible. He sees the debt and is putting all the burden on you, for YEARS? We aren't talking a layoff or an illness here, it's just a desire to be his own boss, turn his nose up and everything, and that is just arrogance. You two are supposed to be like a team shouldering the burden, it should not be 100% on someone else 100% all the time, unless this was something you both agreed on, and your post says that isn't the case.
I have friends who are musicians, they play around town, record music, and have friends in the industry, with the exception of one, they ALL have day jobs -- one works in IT, the other one in landscaping, the other one in the restaurant business...the only one who doesn't is one who makes soundtracks for the entertainment industry -- commercials, movies, TV shows, and he works pretty hard at it, composing up to 20 songs a day, working over 10 hours and spending thousands on music equipment. I know a few who have become music teachers or opened their own music shops, no shame in teaching kids to play music. I kind of can relate though, my ex-husband refused to take jobs that were "beneath him" in pay grade, lost his condo in the process, and then threatened self-harm when I tried leaving him. I left him and guess what? He is alive and kicking, remarried, too. Empty threats, I realized, when I ended up believing what B said below, that the responsibility was not mine and I should not feel guilty if he did follow through.
As to the kids being devastated about you two getting a divorce, trust me, kids know more than they let on. I am sure they are feeling the tension and resentment and hearing arguing on a daily basis, they aren't deaf or blind and can pick up on things. You have also had several trial separations, so they sort of have grown accustomed to this and can adapt. I am sure they will manage better than you think. Just because you get a divorce doesn't mean he stops being a part of their life or no longer is a good dad. You can even do things with them together, if he is amenable to an amicable split. Do you love your husband? That is the most important question to answer. If you do, you will work on your marriage because you love this man and want to make it work. Get counseling as a couple, in that case. If not, don't let his manipulation keep you around, as your resentment will grow and you will live with regrets if you allow yourself to be held back due to a threat of self-harm looming over your head. Don't let that be the only reason you stay.