You will need to pay federal income tax on the amount withdrawn plus an early withdrawal penalty. (For me, this amounted to 20% for the former and 10% for the penalty, a total of 30% of the amount withdrawn.) Your 401(k) advisor can walk you through the process. It stings to lose 30%, but in some cases, it's clearly the best option. You should also begin communicating with your credit card companies to see if you can negotiate a lower rate or better terms (lower payment). Good luck to you and your wife.