I am going through the processing of my first potential hardship withdrawal. The employee is facing foreclosure.

I know one of the requirements is that she prove to me she's used all other available resources before applying for hardship....she is not eligible for any employee loans, she can't take a 401k loan (her balance is too low)....does she have to prove anything else?

Also, the foreclosure is on the house that she lives in with her boyfriend (they are the parents of a small child and have lived together for years). She can verify that this is her permanent residence but the mortgage is in his name only...is this a problem?

I'd appreciate any help....I'm learning the ropes here!

Prevention of eviction is a hardship event even if you rent, so the fact that the boyfriend owes the mortgage is not a problem. Somebody may want to question her sanity at giving up future retirement inncome to reduce her boyfriend's debts, but that doesn't affect her rights under the plan.

On proof of actual need, there aren't hard and fast rules unless you are in the safe harbor involving suspension of deferrals, in which case you don't have to make any inquiries.

My suggestion is you make her represent that the hardship cannot be relieved by reimbursement or compensation by insurance or otherwise, by cessation of deferrals under the plan, by sale of other assets the sale of which would not be itself a hardship, or by distributions or loans from plans or from commercial sources on reasonable commercial terms. Of course, under the first item she is saying that the boyfriend can't pay.