I feel your pain - essentially, you need to decide a few things here:
- If you want to default, since the debt is substantial, obviously don't touch the 401K (this is a last-resort option, but I want to mention it up front).
- If you want to reorganize, do *not* use a debt consolidation service. Call each card company and renegotiate the rate. They're all concerned that people will take option (a) above, so you have some bargaining power, especially if you've been paying off the cards reliably for a couple of years.
- If you haven't look at cheap balance transfers, now is the time to do so. Discover and Mastercard have a few I've seen - you may well be declined, but it's worth an online application.
Ok, so now onto your 401K:
- Any money you remove obviously gets the 10% penalty + taxes, which will amount to around 35%. That leaves you with $39k (roughly), which doesn't pay off the cards.
- If it's still worth $60k after all the recent problems, I would suggest not using this money, since it will likely recover in the next 2-3 years (if it's equity based).
- If your APR gets increased further, or your income situation changes, then you should reassess what I've just said.
As an aside, I have a suspicion that the tax rules may get changed in January to accommodate emergency 401k withdrawals (ie. removing the penalty) due to the economy. So if you can hold off until then, I would recommend doing so.
I hope this helps!