Yes, you should be concerned.my mother is also saying that myself (who has been contributing 100% fair share toward the rent throughout this entire period from my job earnings) and my dad will ALSO face jail time because we were all living in the same house.. Is this realistic and should I be concerned about this?
Your mother committed a crime. Call it embezzlement or conversion but she can be prosecuted and convicted. Whether or not she serves time is anybody's guess.
While it might not happen, she could easily incriminate both you and your Dad by testifying that you both colluded in the misuse of the money and you and your Dad would have to prove otherwise which likely means throwing your mother under the bus.
That's a different story. For any of your personal assets to be at risk the victim would have to sue you and get a judgment. You don't say where you are (you ignored the question and there's good reason for it being asked) but in all but about 3 states your pay can be garnished with a judgment and your non-exempt property can be attached.Can they also cease (you mean seize) my personal (non-cosigned) property to pay the debt off just because I live in the same house?
Of course, if you are convicted of a crime, restitution might be mandatory and a condition of any probation you might get.
None of you should be talking to anybody about this, especially not cops, without a lawyer.

