I have 54,000 in my 401k, not really enough to make a difference in my retirement.

Am also on disability.

If you can comfortably pay your second, I'd leave your 401k right alone.

No I can't really pay my second, now that my income is cut in half.
It would be nice to have more money to live on but I really don't know how many more years I will be able to function. Would like to see a few places before I can't.

Maybe I should take bankruptcy and get out from under my debt. Would like to leave some money for my daughter. Bankruptcy verse taking money out of 401K?

Why not just sell your home?

Bankruptcy won't get rid of your mortgage obligations.

Sell my home, well, I am underwater by 200,000 no way to sell. Bank refuses short sale.

This 401K was a roll over from my deceased husband work.

Ouch on being so under water on the mortgage. It's far too common these days.

Your other option is to simply walk away from the house and let them foreclose if they won't work with you on a short sale, and try to find more affordable housing that is more in line with your current income.

It's nice to want to leave something behind for your child, but I doubt she'd appreciate the money much if she knew you had to struggle during your retirement years to do so.

The 401k is less than what I would be getting if I pay off my second.
Paying 300 for second getting 128 from 401k. Monthly money wise I would be doing better paying the second off. the extra 160 will pay for food. I don't pay income taxes now.
Don't really want to walk away, would lose my down payment and all the money I put into the house. has to be another option, 401k is all I can think of to cash in and help out now not years down the road.

Consider taking some more money out of the 401(k) each year, and using that to pay for or pay down the second mortgage.

Rather than paying income tax on a chunk of money, you can figure out how much you would be able to take out and pay little or no income tax. Then use that money to make the payments on the second mortgage. Because of your age, there would be no early distribution penalty. No reason to lose any of this money to income tax unless you absolutely have to have it.