My husband found out he is going to be unemployed the end of this month. His COBRA payments are going to be $1000 a month. We can not pay that for very long 1 month or 2. Where should we tap into first. We have a 401K and we have a unused line of credit.We also have IRAS if we HAVE TO which one whould be best to tap into?

How about get a new job?

He is out there looking.. He posted on Monster and Career Builders job sites already and has a interview tomorrow.. I am just looking ahead and hope we don't have to go this route....

I would tap the line of credit first. Is there a specific reason that you're going to pay the COBRA payments? If you're relatively healthy and you don't have many assets worth protecting, you might want to consider Catastrophic coverage for much less.

Probably best to get a part time job while he is looking for work. But if that doesnt pan out I would try to borrow money from family, if thats not feasible then use the credit cards.
If your husband stays unemployed for a long time you can declare bankruptcy. If you take out 401k money you pay a penalty and pay taxes on that money. When you look at what % of what you expect that 401k money to be when you retire. You're looking at 40%+ cost of that money. Which is much higher than the cost of getting money off a credit card.

But before I ran up money on credit cards I would sell my new cars and get used. Sell that plasma tv, sell my house if possible. Anything to stay out of debt.

swandown said:I would tap the line of credit first. Is there a specific reason that you're going to pay the COBRA payments? If you're relatively healthy and you don't have many assets worth protecting, you might want to consider Catastrophic coverage for much less.

Well I am looking into a different coverage that offers just medical no dental that is cheaper but I have asthma and he has high blood pressure issues so we both take meds for these conditions. Not sure we could switch to another medical plan and still have these items covered..I am looking into this..

jdsong2 said:I work for the local school district parttime. We have young children so I would like to be home when they get off the bus. I am waiting to see what job might come his way before looking for more hours myself.. If he goes 2nd shift I can get more hours first shift.. If he gets 1st shift job then I can consider 2nd but with kids in activities after school one of us should be there to drive them and watch their games..

2 people looking is better than 1, if you get one first, he can stay home while looking, or vice versa

jdsong2 said:I thought you could barrow from your 401K as long as you pay it back within a certain time frame without pentilties?? Wouldn't that be better then Line Of Credit??

Yeah but the time frame also ends immediately when you leave the employer. In your case that is the end of the month. Otherwise you will have to pay penalties on early withdrawal.

So if you barrow from your 401 while working and are laid off from that company you have to pay that 401 back whatever you still owe or you get charged fees?? Isn't there some kinda hardship issue you can work out with the company that they have the 401 through??

jdsong2 said:We have young children so I would like to be home when they get off the bus.

So did my mom but we couldn't afford it. Thank God she got a job or we might have ended up homeless.