I was terminated from my job and do not know how long before I find another. I have $10,000 in a 401K from my past company. I was bringing home approx. $2100/mo and now will only have $1,000/mo. From unemployment until I find another job. I am 56 years of age so it is not going to be easy. Is there a way to cash in my 401K to offset the difference in my monthly income without paying the hefty penalties? Credit is not the greatest so a loan is probably out of the question.

If you are over 55 when you are separated from employment you can take withdrawals from your 401(k) without having to pay the 10% early-withdrawal penalty. You will of course have to pay ordinary income tax (federal and state/local, if applicable where you live).