I'm 46 and was laid-off in 2020 with the plant most likely closing down permanently. I was able to get in a program called TAA that would pay for me to go to college. I would be able to collect unemployment and between that and my savings I was fine up until recently. The company deposited $2,600 in to my account a month ago and the union said it was fine to spend it so I paid off debt , 2 weeks later I get a letter saying it was an error and I had 2 weeks to pay it back or it was going to collections for $4,000. Between that and my savings dwindling rapidly it's getting tough financially. I called the company to work out a payment plan but they wanted a payment too high for me to afford and told me I'd probably be best to terminate my employment and cash out my 401k (I'm still laid off but officially an employee). I agreed but now feel I've made a mistake. The 401k was only $13,000 but I haven't withdrew it yet and I'm down to around $6,000 in my savings with about 6 months left until i graduate and find a job so my question is should I go ahead and withdraw it or roll it over into a IRA and just pay the money owed using a credit card? I'm aware of the early withdrawal penalty.