I didn’t read most of this thread so if this was mentioned, I apologize. Sorry to hear about your situation, but agree with tg that selling and moving on is probably the best long term outcome for the reasons described.
I wanted to also mention that instead of doing a 401(k) withdraw, see if you can take a 401k loan instead. I’ve done it before myself.
The loan is easy and most places let you fill out the form online. You pay interest to yourself, there are some minor fees, but it will buy you some time (up to 5 years I think). In most cases, you can tap up to 50k or up to half your 401(k) balance.
Major major risk is if you leave your job, you may have to pay the loan back immediately or you face penalties and taxes.
However, that’s nothing new if if you were planning to withdraw it anyways for your situation.
I agree with the other posters, you should probably just cut out your ex-in laws and learn that with money received, there are usually strings attached so closing out that note will close that problem and not have to deal with them anymore.
Lastly, on the “pay taxes with after tax money” when using a 401k loan, that is not true. I used to think the same thing, but here’s a more detailed description of it here:
