I'm trying to decide if I will come to regret it and thus falling into a worse depression.
I've completely missed this thread until now, as I haven't been very active here lately either, so have just catched up reading through it. I'm sorry to hear what you're going through Lobo, and I can relate to your situation and circumstances somewhat, as I've been in a similar spot for some years now, where I haven't been well enough to get to a good spot economically. And so I haven't had much creativity either. Last year I finally managed to find and buy an affordable TINY cottage about 70 square feet or so, where I'm hoping to gradually become a little bit self-sufficient by growing root vegetables and such, as to rid myself of some of the economical pressure I'm under. I had to sell some stuff to come up with money for the cottage, like my ASR-10 Rack, as I'm also opposed to loaning money if I can avoid it. I have no loans atm so I can't complain, as my boat isn't leaking in that sense.
My personal story/rant: (OT, feel free to skip)
So I've been on the lowest sickpay for about 4 years now, long story short: I had to retire as a railroad welder prematurely 15 years ago, as my back was screwed up. I've invested heavily, financially and otherwise for 7-8 years to find a solution, and finally found a chiropractic who was able to actually treat the cause, not just alleviate symptoms like others. The guy said it was literally like cement at this point, which took months to crack. I'm blessed to not be in wheelchair by now, only somewhat limited physically. I've had some other jobs since, but then ran into some other problems that wore- and eventually broke me down mentally, which is the reason I've been on sick leave these last years, not my back problems. I get mental fatigue after about 2 hours now, and I'm not very creative anymore, so I've been having the same thoughts as you, giving up gear and music altogether. But I'm hesitant to let circumstances completely dictate my life. I get anxiety and depression from the situation, sure, but most people suffer so much worse. Low income is helped by lowering outgoings as much as possible, and increased gratitude and humility hopefully.
If you don't HAVE to sell off gear right now, I'd say don't jump the gun if you're uncertain. Wait until you're sure. As others have mentioned, you could scale down bit by bit, even if I get your either/or mentality. These days one can still continue doing electronic music WITHOUT gear, except for a PC that is. VCV Rack comes to my mind, which I've found some comfort in, knowing that even if I sell everything I don't have to jump ship altogether, or that I can get back on it later. I guess I'm trying to get to a mindset that will make these decisions somewhat less "pumped up" or whatever, smaller. If a piece of gear is widely available today, that also lessens the decision, in case of regret.
I will probably end up selling off most of my stuff eventually anyhow, but maybe save a synth or two, if I can afford to. I don't see selling my gear as a "solution" to the economic situation, as I will eventually run out of gear to sell... But like you, I too want to have a money"buffer" for when I may suddenly need it. An approach I sometimes have in contrast to the absolute either/or, is to put up some pieces of gear for sale at a price I personally value them. Several pieces at the one time. Whatever gets sold, I'm at least content with the deal, and if it doesn't sell I keep it for now. When having a couple of pieces up, what goes goes, and I feel it's a bit more "out of my hands" once they're up this way, which for me diminishes the angst of the decision-making, I think. And I don't go all to nothing. You could sell off just one piece and see how it feels, first.
Sorry for rambling, this ended up being way longer than I intended. Whatever conclusion you come to, I wish you no regrets mainly. If possible, my advice is to find some way(s) to make the decision(s) feel "lesser". All the best!
Btw, this video has been helpful to me, regarding not giving up playing music altogether. And Benn Jordan recently made a video somewhat regarding the topic too: