I own majority stake (60%) in a house with a great mortgage. Past year+ company I worked for dropped us down to minimum wage with periodic supplemental distributions based on our original salaries and money in. 100% paid benefits still. Needless to say I stuck around hoping for the best; 17 pay periods at $8xhr form an 80k salary. We were supplemented only 4 pay periods in that 17 @80% our original salaries. I went through roughly 6k of my savings to keep afloat in those 8-9 months.
I ended up asking to be laid off like some others before me, because things just didn't look promising and on unemployment (12xhr) I could actually survive paying my portion of the mortgage and not using anymore savings. My biggest mental hurdle leaving was getting paid $8xhr on my 200+hrs of PTO. That was in late April (10).
Fiancé; had been covering 40% of the mortgage decides after 6 yrs she wants out for someone else and leaves me with the entire mortgage (June-July). Prideful, using the legal system to force her to pay is my last resort as I want zero interaction with her. As I stated before I own 60% and she stopped paying. She is still on the loan, and I will assume it 100% once I become employed again. I know this situation is shaky at best, but if I have to go to court then so be it. What's owed on the house its worth there's little + equity, and I get the first 60% anyway. I have no other debts, except for the ring; which I have and can exchange sometime in the future. I still can't find work, but maintain my side jobs. It's still tough to clear an extra 1k under the table on top of my max unemployment benefits each month.

I have reduced all my outgoing cash to minimum and I'm on the brink from going to credit. I have a 45k 401k awaiting me. I have a 4k loan on it so available is 41k. I have made practically nothing this year and so I figure I'll be in one of the lowest tax brackets. I get to claim all 100% of my mortgage interest at the end of the year as well. It seems like I have no other recourse than to cash out my 401k, unless I can get a job in the next 3 weeks (actively looking for 4 months). It has to pay at least $20xhr and be good for a year; otherwise I will ruin my max unemployment benefits and be royally screwed.
So many variables, but it seems like I have no choice as I cannot mentally use credit to survive.
What is the 10% penalty for early withdrawal assessed on? Gross, net? I know some people would say to roll it to an IRA or other then take a loan on it, but I would much rather take the lump sum and manage it myself probably less long term fees, restrictions and worry involved that way?

Thanks for reading.

First, the 10% penalty is on the full amount of the withdrawal. So if you cashed out the $41K, the penalty is $4.1K. Second, be aware that since you are no longer employed the $4K loan you already have will be automatically reclassified as a withdrawal (since you have no salary for them to withhold payments from) 60 days from the time you were laid off, unless you pay the $4K back. That obviously doesn't sound too likely, so be aware that you already owe $410 penalty plus income tax on the $4K.

Your plan for the house sounds shaky. Your ex is still a 40% owner, even if you start paying 100% of the mortgage. Somehow you have to get her off the deed as well as the mortgage. Since you don't have cash to buy her out, I suggest that you bite the bullet and put the house up for sale. It's the only way to unravel the intertwined financial relationship with your ex. Sorry, but that's essentially what you decided to do when you decided to jointly own and pay for the mortgage.

Yes, with her owing 40 percent ( not sure where that number comes from) in divorce court. You could have to pay her out for her share of the house to continue to keep it. Division of property at divorce is always hard to predict.

Next sorry unemployment pays more, not sure where you are at, but here in GA the max unemployment is only about 330 dollars. And no benefits, Even a 8 dollar a hour job is a lot better than no job.

So you want to look for a new job, do it while working.

Next work on the budget, get a second part time job.

I appreciate both responses. I like to see how others view my situation.
There are a ton of other variables which play a role here and there.

Max CA UI benefits are $450+25 weekly. $1950 mo. I do not withhold tax, mortgage is 2600 and worth every penny.

Fed tax credit was taken in her name only (8k), if we sell she owes 5k+ prorate back. 1 yr down 2 left.

If we sell with SOME + equity, all the title, escrow, and real estate fees we will still both owe thousands. She has ZERO capital.
She has already made it clear that she will forfeit her share for us to move on. Question is what sort of agreement can I have made that holds her to it? If I remove her from title that might trigger the IRS to go after her for the remaining tax credit. That's one of my leverages.
The idea is to leave everything be with a contractual agreement in place that states she doesn't assume any debt of selling or removing her from mortgage/title, until she feels she can pay the remaining tax credit penalty or the 2yrs left on that are up and she's not responsible for the monthly mortgage payment. In exchange she gives up all interest in the property.
I have most of the leverage here; I just need continuing capitol and some piece of paper that will hold up in court. Regardless of the economy, based on my homes geographical location, type of property and price paid, equity will only climb. In one year, probably the worst on record I already have 20k+ in equity. It's just not enough.