You should definitely talk to a lawyer in your area, before you respond to the creditor's lawyer, take money out of your 401(k) or file bankruptcy.  There are listings of qualifed attorneys in a number of places, including our website, http://attorneypages.comThere is a penalty you have to pay on early withdrawals from a 401(k) account, and the money is taxable income, also (since you didn't pay income taxes on that money when you earned it, this is one of the reasons for retirement accounts in general).  If you file bankruptcy, that ordinarily brings lawsuits against you to a stop until the bankruptcy is involved, although there are exceptions to that.