Hardship for debt

[Guest Wheatie]

My institution's attorney tells me that an employee who has requested a hardship distribution to repay/defray credit card debt that her ex-spouse incurred in her name must document how the debt would lead her to eviction to qualify for the distribution. She is newly divorced, has custody of two young children, and has already taken a loan to pay bills that are coming due. Any suggestions for how we should proceed?

[JanetM]

If you are using the safe harbor rules for hardship you have to meet one of the provisions to qualify. In this case it would be foreclosure/eviction. If the plan allows hardships for financial distress then a statement from the participant covers it.