Early withdrawal from a 401K is subject to a 10% penalty. You will also have to pay income tax on the withdrawal according to your tax bracket.

You'll have to pay huge in taxes when tax session comes around again. Either way you'll still have debt, it's only a matter of who you will owe.

You should count on up to 40%, if not more, of that 401k money to go *poof* in taxes and penalties should you decide it's a good idea to use it to pay off your credit card debt.

If your house is that underwater, and you have that much in unsecured debt, just walk away from the house and file bankruptcy. It's not the worst thing in the world. Depending on your income, you may be so far in over your head it could be the better way out of it than jeopardizing your retirement fund. What are you going to do, work until you drop?

Most folks who do this, instead of working an extra job and cutting back expenses everywhere they can making a concentrated effort to pay down their debts, simply pile on more debt later, they don't learn good spending and saving habits. The only way you'll ever learn not to get in so far is to work hard at making it go away instead of taking the easy routes of bankruptcy and pirating their future financial health.

I suggest you suspend making contributions to your 401k for and using that money instead to put towards your debt, AND getting an additional source of income, even if it's only a few hundred a month. Cancel the cell phones, stop buying things, go to bed early to save on electric.... anything to cut your spending so you can throw as much to your debt as possible.

The government charges a 10% penalty for early withdrawal from a 401-K plan. In addition to the penalty, you are also responsible for the income tax associated with the withdrawal. The percentage depends on your current income adding the $30,000 to your earned income. The additional 30,000 of income could put you into a higher income tax bracket, say 35% then the cost associated with your early withdrawal just goes up. I would think very long before I took out that money. I would do whatever else you can to eliminate your credit card debt. First thing, cut up the cards!