If you are in debt due to your mortgage payments, you probably won't be able to take advantage of the various consolidation or negotiation plans that are available.

However, you can still negotiate directly with the bank that holds your mortgage. If you are having financial difficulties then there are a number of government programs that you may be able to use in order to lower your mortgage payments and keep your house.

You might be able to easily make your mortgage payments if your other debts were more under control. Sometimes people have credit card debts that so out of control that they can no longer make their mortgage payments and have to choose who to pay.

In general, you should pay your mortgage payment first. You need to keep your home. Your other debts can wait. However, they won't wait forever. Eventually, probably sooner rather than later, you will need to face up to your credit card debt and other unsecured loans or you will be facing bankruptcy.

Bankruptcy and Your Mortgage

Just because you go bankrupt, that does not necessarily mean that you will lose your home. They can be two separate issues. The bankruptcy laws are different in each state but most include a clause that will allow you to exclude your mortgage from bankruptcy court. There are other assets that may be excluded as well.

The main thing to remember about your mortgage and bankruptcy is that in many cases, bankruptcy can be avoided altogether. There are a number of debt consolidation solutions that could help you get a handle on your financial situation.

A few options that you might consider include a second mortgage, an unsecured debt consolidation loan or a debt negotiation service. Each of these options has a benefit as well as a pitfall (or two).

It is possible to take out a loan on your existing home so that you can pay off your unsecured debts. This is commonly referred to as a second mortgage or equity loan.

Using a second mortgage as a debt consolidation loan can be a good alternative to conventional unsecured debt consolidation loans because second mortgages usually come with a much lower interest rate than unsecured loans.

The downside of the second mortgage method of debt consolidation is that you will be rolling the dice with your home. If you end up not being able to make payments on your second mortgage then your mortgage company can take your house away.

You need to think very carefully before taking out a second mortgage on your home. If you would like to stay on safer ground then you might want to consider an unsecured debt consolidation loan or a debt negotiation service.

An unsecured debt consolidation loan will create one big loan in order to pay off several smaller loans. This is typically accomplished when a debt consolidation loan company takes over your bills.

They loan you enough money to pay off your other credit card debts and give you one lump sum payment rather than several smaller payments. For instance, you might have 5 credit cards with monthly payments that total $500. The debt consolidation company may be able to set up a new loan for you where you only have to pay $200 per month. The idea is to save enough per month so that you can pay your mortgage payment on time.

A debt negotiation service will take a slightly different approach to your credit card debt. They will negotiate with your credit card companies (but not your mortgage company) in order to strike a deal and get you a lower interest rate and lower monthly payments.

In most cases, you would then just make one monthly payment (to the debt negotiation service) and your monthly payment would be significantly lower than what you were paying for all of your credit card bills on an individual basis.

In the end, you will have to make a few decisions when it comes to your mortgage and your situation with debt. You might find that it is a good idea to get some help. With debt counseling, you and your counselor should be able to come up with a viable solution.