Wits end

Hi this is really difficult for me to begin so please don't be judgemental as this is a really tough time for me now and I'm sorry for the long post. Basically we are in severe debt and to top it all my husband is currently waiting for tests to see if he has bowel or stomach cancer. Consequently I'm absolutely terrified of him having this diagnosis, I cannot keep my mind from fearing the worse not only the emotional wrench of losing him but also where this would leave me and my teenage daughter. We're obviously praying it's not this diagnosis but all the indicators are not good. Even if he has it and it is treatable he is self employed he's the main breadwinner and I worry how well manage with our debts if he's unable to work as he's too ill and having treatment. The reasons we are in so much debt is because I fell pregnant just at the time he was setting up his business and the childcare and the fluctuations in his income crippled us. We have therefore lurched for the last 15 years since she was born going from loans to remortgaged to hefty expensive credit cards etc. Coupled with the fact that I then got made redundant and had to take a job which paid around £600 per month less. We've been head in the sand for far too long I know but this is the facts of the situation. I estimate that between us our debts are circa £60k!! Which absolutely terrifies me. Most of this is expensive credit card debt which is why it's escalated so much as the interest rates are so high. We've tried switching to lower rates in years gone by but now we are limited with who we've got. We've also got a car loan but this is due to finish next February. The rest of our debt is overdrafts and we've got a £95k repayment mortgage. Thankfully none of our debts are secured against our home but I realise that if I lost my husband his creditors can take any of his assets before I inherit them. And if I lose him I can't afford the repayments without his income. Most of the card debt is in my name because I was the one in an employed job which also terrifies me but we did this because of his self employed status but they are joint debts although on paper it doesn't look that way. He has about £15k of debt in his name alone, the car loan and mortgage is in joint names. None of the debts are secured against his business and he is a sole trader.
So all this is really scary stuff. We only have about 8 years left on our mortgage and then it would be paid off. I love our home and it's full of memories and if the worst should happen I want to be able to stay in the family home especially as I have excellent neighbours who I am going to need for support. We do have life insurance and critical illness cover on our mortgage but and this is a big but, it's a reducing term assurance. I've checked the policy and if anything happens this year it would pay out £59k, £51k next year and so on. This is obviously a shortfall on our current mortgage balance as stupidly we couldn't afford to increase our insurance premiums. Naively we thought with only 8 years to go on the mortgage we'd pay this off then throw our mortgage money at our debts and the additional car loan money once paid up to our debts to try and clear them, and snowball them. I'd asked him to consider an Iva or Dpm previously but he won't as he didn't want to risk our house or his business and having a bad credit rating. He has no debts on his business like van loans but obviously has his monthly materials bills etc. He is getting very depressed obviously with the diagnosis hanging over us we're all very anxious and also because he's unwell he can't do anything although he is still currently managing to work, but for how long? We can't afford to go out and do anything to cheer him up. I feel like I'm carrying this burden alone, his parents are deceased and he's an only child, my parents are alive but my mum is undergoing cancer treatment herself and I can't add to their burdens plus I'm so ashamed. He does have sickeness cover for his work but this only pays out about £160 per week, no where near enough to cover our bills. His income fluctuates hugely each month which is why we've robbed peter to pay Paul all these years. I bring home around £1200 per month. He doesn't have a pension as he couldn't afford it (I do and it's a good one) so I worry I won't have an income from him. He has a very old frozen pension but there's hardly anything in it. So you can see I'm in a complete mess with not knowing where to start or turn for help. Meanwhile if he does have cancer I've got to try and find the strength to support him through this which will also mean me taking time off from my job if he needs operations etc and I clearly need my job! I've also got to try and support my daughter who I don't want unsettled too much as she's in an important year at school exams wise. I just feel a wreck!
I would welcome any help or ideas of what we can please do! I've thought should we up our life insurance now but if he does get the diagnosis it may be too late. If it is bd news and we can claim the critical illness /life insurance of £59k does that actually have to be used to pay off the mortgage or do you get it in a cash lump sum? I'm assuming you have to use it to pay off the mortgage as it's a decreasing term with mortgage but if not I was wondering if I could use it to pay off debts then I could take on the mortgage myself but extend the term so the payments were more affordable? If not could I pay off the mortgage but this would still mean there's £36k left that won't be paid off. I could afford payments on a £36k mortgage but not with debts of £60k! And they wouldn't give me a mortgage on just my salary with all these debts against my name. God forbid if the worst happened I couldn't even afford his funeral!!
I've thought about selling the house too. The mortgage is £95k and I estimate on current house values our house is worth £250k. I don't want to leave this house I really don't but am wondering if we have no option but also if I sold and cleared debts I'd still have to try and start again with security for my daughter. I'm 43 my husbands 44 and I'm completely at a loss and can't think straight. Please help!