[kbeep]

I have a particular problem and not sure how to handle it. I was let go from my company and am presently waiting for a hearing for unemployment compensation so I have no income coming in. I do not have this months mortgage payment coming due July 1st and I have really good credit and did not want to mess this up. I have two credit cards one is full to the limit $30,000 which has a low 2.99% rate until feb 2008 and one is about $10,000 with a lifetime of 4.99% so both of these payments are $700 each month. My mortgage is approximately $2650 per month and I have a boat loan that I pay approximately $287 per month. I do not have kids , I am married and the money my husband brings in is $510 biweekly and that just covers food, electric, gas and not much else. My question is I have a 401k with my old company that is $37,000 approximately and I was wondering if anyone could think of a way for me to take the money out without losing the 30% off the top or would you suggest I take out more credit on another credit card I have that is offering me 0% until feb 2008 until I get a job and settle with unemployment? I have not worked since beginning of May 2007 and I don't have health insurance either and one of my husbands drugs is $270 per month which will also come due at the beginning of July. Any suggestions? Thanks!

[RichardBondMan]

Sorry to hear of your situation, you will get lots of opinions and, of course, you and your spouse will make the ultimate decisions but here's my ideas 1) place a for sale sign on the boat and sell it and payoff the loan and hopefully you will get enough from the sale of the boat to help with current expense and keep your good credit 2) Purchase health insurance for you and him that covers major medical expenses but understand his and your current medical issues may be excluded via a waiting period for pre existing conditions and you or he may be unnsurable if you were to have a "systemic" disease such as diabetes for example. One of the leading causes of bankruptcy is being w/o medical insurance and incurring large medical expenses 3) Seek employment now, not waiting for the "perfect" job, get the cash flowing in as quickly as possible. 4) make a plan to somehow set aside at least $1000 or so in cash for emergencies eventually leading to a sum equal to 3 to 6 months of net income for emergencies such as the one you are currently facing 4) Do not borrow additional monies if at all possible 5) ask you former employer or the 4019k) provider if the plan provisions allow a "loan" rather than surrendering or taking cash out of the plan. Once you recover from this emergency, you could then "pay yourseelf back" by making payments on the 401(k) loan. Some plans allow loans while others do not. I hope my ideas help you.

[kbeep]

Thanks for your ideas, I did check on the 401k and no loan is possible :( Yes, I have been researching the different plans on the insurance so I will make that decision immediately
Well thanks again!

[ScottGem]

You can make a hardship withdrawal from your 401K to stave off foreclosure. But that would mean waiting until the bank forecloses. Even then that only gets you out of the 10% penalty, not the tax liability.

I agree with Richard that the boat has to go. I would also look into trading down on your house. If you have no kids $2650 could indicate the house is too big for you.