hardship withdrawal
Gaining traction is your first priority. WARNING: as @JosephZambrano explains in his answer the tax penalty for withdrawing from a 401(k) can easily exceed the APR of the credit card making it a very bad strategy. Consult in-depth with a financial advisor to see before taking that path.  As @JoeTaxpayer has noted a loan is another alternative. The 401k is no good to you if you can't have shelter or comfort in the mean time.  The idea is to look at all the money as a single thing and balance it together.  There is no credit and retirement, just a single target that you can hit by moving the good money to clear the bad. Consolidating the credit card debt somehow would be very wise if you can.  Assuming it is 30% APR shrinking that quickly is the first priority. You may be able to justify a hardship withdrawal to finance the reduction/consolidation of the credit card.  It may be worth considering negotiating a closure arrangement with a reduced principal.  Credit card companies can be quite open to this as it gets their money back. You may also be able to negotiate a lower interest rate. You may be able to negotiate a non-credit-affecting debt consolidation with a debt consolidator.  They want to make money and a 25K loan to a person with sound credit is a pretty good bet. Moving, buying a house, or any of that may just relocate the problem.   You may be able to withdraw $25K from your 401k under hardship, pay the credit card, and come up with a payment plan for the medical debt. It's a retirement setback for sure, but retirement is an illusion with that credit card shark eating all of your hard-earned money.  You gotta slay that beast quick. Again, be sure to fully analyze whether the penalty on the 401(k) withdrawal exceeds the APR of the credit card. With respect to the 401(k). Before taking a hardship withdrawal, one must first deplete the ability to take any 401(k) loans available. This is a regulation. The 401(k) loan limit is the lesser of $50k, 50% your vested balance, or $50k minus the highest loan balance within the last year. Here's the good news: it is not a taxable event; you can pay back over a maximum of 5 years; interest is low (usually 4.25% or so). The bad news: if you terminate employment then the loan balance must be repaid or else it becomes taxable income plus a 10% penalty. I suggest you consider eliminating the credit card debt via this option. Pay back as aggressively as possible and if/when you terminate you can take the 10% penalty - it will be far less of an impact than 25k accruing approximately 25% annually.
My advice to you? Act like responsible adults and owe up to your financial commitments.  When you bought your house and took out a loan from the bank, you made an agreement to pay it back. If you breach this agreement, you deserve to have your credit score trashed.  What do you think will happen to the $100K+ if you decide to stiff the bank? The bank will make up for its loss by increasing the mortgage rates for others that are taking out loans, so responsible borrowers get to subsidize those that shirk their responsibilities. If you were in a true hardship situation, I would be inclined to take a different stance. But, as you've indicated, you are perfectly able to make the payments -- you just don't feel like it. Real estate fluctuates in value, just like any other asset. If a stock I bought drops in value, does the government come and bail me out? Of course not! What I find most problematic about your plan is that not only do you wish to breach your agreement, but you are also looking for ways to conceal your breach. Please think about this. Best of luck with your decision. "I think the answer depends very much on where you are.  I believe the other answer covers north america. On contrast, in (continental) Europe, giving the account and bank number (IBAN and BIC) is a (the most) common way to enable someone to send money to you.  E.g. in Germany, you need much more than account number and bank number to withdraw money:  To ""push"" money to another account (wire transfer from your account to someone who gave you the other account + bank numbers), you either have to hand-sign a certain form, or (online) certain credentials (e.g. login & password / PIN + TAN) are needed. I.e. for defrauding you, the other would need to get your online credentials (for mTAN also your mobile phone, for chipTAN a TAN generator of your bank [easy] and your bank card, for (i)TAN your TAN list) or fake your signature. There are also ways to allow someone to pull money from your account, see e.g. direct debit For that you sign that the other side is allowed to withdraw specified amounts of money (at specified dates). This is either  between you and the other (i.e. your bank cannot check and doesn't reject withdrawals that are not authorized). However, the other side needs to have signed a contract with their bank that they'll only try to withdraw money they're entitled to.  or you sign such a thing with your bank (then they do know whether the other side is allowed to withdraw money, and you can tell the bank that you won't accept any further withdrawals from XYZ).  In the first case, the withdrawal technically still needs your approval. In order not to create a huge risk of fraud, the rejecting here is really easy:  If you tell your bank that you reject the payment,  The practical rule is that the payment is approved if you didn't reject within the first 6 weeks after the bank sent the account statement. In other words, until 4 1/2 months after the withdrawal (in case you have a bank that does only quarterly account statements), the one to get the money cannot be really sure that he actually has the money. I think (but I'm not completely sure, maybe someone else can comment/edit) that these two possibilities are also what is used with debit card payments (EC/Maestro card - these are much more common here than real credit card payments).  -- end of Germany specific example --" I did some empirical research, comparing the exchange rates for wire transfers vs. the exchange rates for ATM withdrawals. With my bank, wire transfers typically take a 4% float off the exchange rate. ATM withdrawals seem to take just over 2%. And ATM withdrawals don't have a wire transfer fee, as long as I'm withdrawing from a branch of the same bank (overseas). The only problem with ATM withdrawals is the daily limit. As far as I can see, Tor's answer above has it completely backwards, at least with my bank, ATM withdrawals are a much better value. Do the research yourself...call the bank you're going to transfer from and find out what their current exchange rate is. Compare it to the current spot rate (e.g. XE.com) to determine how much of a cut the bank is taking. Then, if you can, withdraw some cash from the foreign location with your ATM card and see how much of the original currency is deducted from your account. In this way you can empirically discover for yourself the better rate. If you made a contribution to a Traditional IRA for Year X (whether made during Year X or made in Year X+1 before the due date of your tax return for Year X), then you can withdraw the contribution and any gains on that contribution  by the due date of your tax return. If the contribution was deductible, then of course you must not take a deduction for it in on your tax return for Year X (or any other year for that matter). As for the gains (if any) that were withdrawn, they are taxable income to you for Year X (not X+1, even if the withdrawal occurred in Year X+1). Publication 590a says You generally can make a tax-free withdrawal of contributions if you do it before the due date for filing your tax return for the year in which you made them. This means that, even if you are under age 59-1/2, the 10% additional tax may not apply. and later in the same Publication If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. You can do this if, for each contribution you withdraw, both of the following conditions apply.   -  You did not take a deduction for the contribution.   - You withdraw any interest or other income earned on the contribution. You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn.    If there was a loss, the net income earned on the contribution may be a negative amount. Later, the document says You must include in income any earnings on the contributions you withdraw. Include the earnings in income for the year in which you made the contributions, not the year in which you withdraw them. and The 10% additional tax on distributions made before you reach age 59-1/2 does not apply to these tax-free withdrawals of your contributions. However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59-1/2 rule, it will be subject to this tax. Since you have a loss on the contributions that you are withdrawing, there is no interest or other income that needs to be reported. a) Talk to the financial aid counselors at your school. There's a very good chance they have at least a partial solution for you. Let them know your dependency status has changed (if it has). I declared myself to be financially independent from my parents (I really was) and qualified for more aide. b) How much austerity are you willing to endure? I once spent two years eating beans & rice twice a day (lots of protein and other nutrients) while I worked full-time and went back to school to pursue a second degree part-time. I also shunned all forms of recreation (not even a movie) to save money (and so I could focus on staying current with assignments). During another period in my life, I gave up cable, cell-phone, land-line (and used Skype only), and avoided unnecessary use of my car, so I could clear a debt. You'd be amazed at how much you can squeeze from a budget if you're willing to endure austerity temporarily. c) Consider going to school part-time, taking as few as one course at a time if allowed. It's a lot easier to pay for one or two courses than to pay for 4 or 5. It may take longer, but at least you won't lose your credits and it won't take forever. I heard some financial institution ask for $25 withdrawal fees on TFSA. Watch out for it. TD told me. I will doublecheck. RBC do not charge withdrawal fees. I will check that too. employed under the table and doesn't have a bank account If I could make that size 10,000,000 font I would.  Your friend likely also isn't paying taxes.  The student loan penalties will be nothing compared to what the IRS does to you.   Avoid taking financial advice from that person. "If you earn $160 a week for 26 weeks, are unable to claim yourself, have no other income at all, you will earn $4,160, which falls under the standard deduction, in your case a bit over $4,500; per publication 17, it is $350 above your earned income, to a maximum of $6300 as of 2016.  (H/t Hart CO for the reminder.) In that case, if you paid no taxes (at all) last year (either did not file or filed and had 0 tax paid, so got a 100% refund), you could legitimately claim ""exempt"" by writing that on line 7.   However, you would be very close to owing taxes, so if you have any unearned income (interest from bank accounts, dividends from your non-sheltered college fund, etc.), you would possibly owe taxes.  You're also going to owe taxes if you have another ~$2150 of earned income from any other source (including things like mowing lawns, tutoring, etc.). Keep all of that in mind if you have any other sources of income other than the above."