How to deal with mentally ill neighbor?

So i have a crazy big lady neighbor, who one day , a month after moving in knocked on my door one morning yelling at me, been mean to me, accusing me, threatning me because she said Id been "banging" on her wall(her room and my room SHARE a very thing wall), later she found out i had talked about it with our landlord and went super crazy. through the wall i could her saying she wanted to snap my neck!, throw me down the stairs, "tear me down" , and that I was basically gonna get it "next time".so i got scared and basically had an anxiety attack , didnt stay the night at my own house, but landlord reured me she was "pive". so I let it go, but after hearing her make more threats to the wall and constantly calling me and all the other neighbors"stupid Mf****rs" , i filed a police report on her(the cops dont do anything, its just a report). since then im always scared to make too much noise in my own house!, even though i hear her tv every night, her laughter, her yelling and cussing, her snoring-she doesnt like it when she hears anybody else's noise. today I accidently dopped a piece of wood, the noise was somewhat loud but it was an accident , and she banged on my door.I didnt answer this time and my roommate was home so I felt safer, but Im still sick and tired of been scared by her and her sometimes family members, and dont like living in a place like this. should i move out or keep ignoring her, is my landlord obligated to give me back my money in case i wanted to move out before my lease is up.