Should I cash out 401k given debt amount?

I am 55 and re-employed after a 4-month layoff. I have $75k in a 401k from previous employer - otherwise no liquid assets. I am remarried with small children. I have ~$40k in credit card debt and cannot afford to live in our home, as my total income now is 26% ($45k/yr) lower. We have accumulated no new debt in tha last two years - but struggle to pay down. When our home sells (it has been on the market for 8 months), I will lose mid-5-figures. I am considering cashing out 401k to eliminate all debt (except mortgage and car payments. Any advice?

If there is any possible way to avoid cashing this out, such as a temporary second job or spouse taking a job or selling a vehicle, don't cash it out. Although it may seem like a quick fix, you will have a 10% penalty in addition to income tax if you cash it out before age 59 1/2. Additionally, you will have depleted funds set aside for future retirement. Please carefully consider all alternatives before moving forward. If you decide you must cash it out, consult with a tax expert to determine how much you tax/penalty liability will be so that you can set aside adequate funds to pay these. Do not count on the amount that is withheld to cover the taxes and penalties.