Ask the Dollar Diva By Dorothy Rosen • Bankrate.com

Is bankruptcy the stairway to heaven?

Dear Dollar Diva,
When filing bankruptcy, does the mortgage payment stop?

No, your regular monthly mortgage payments continue. But if you are behind in your mortgage payments there is some relief when you file bankruptcy, particularly through Chapter 13:

• An "automatic stay" is created. Your creditors -- including your mortgage lender -- must stop all collection activities as soon as they are notified of the bankruptcy filing.

• If you have a balloon payment due, it can be paid over the life of the repayment plan that the court will impose. Such a plan generally runs from three to five years. All efforts to foreclose or file a lien against your property will stop. The lender must get permission from a judge to proceed.

• You will be allowed to make your past-due mortgage payments over the life of the repayment plan, but you must keep current on your regular monthly mortgage payments.

Bankruptcy is a last resort. If you are having a problem paying your bills, The Diva recommends that you visit the Web site of the National Foundation for Consumer Credit to find a not-for-profit credit counseling office in your neighborhood. They're usually called Consumer Credit Counseling Service offices, and they can:

• Help you develop a spending plan that includes living expenses and debt repayment.

• Work with lenders to negotiate a repayment schedule you can afford, including efforts to get finance charges reduced or waived.

• Develop and execute a payment plan you can afford.

• Help you re-establish credit when your current debts are paid off.

DOROTHY ROSEN has a master's degree in finance, with a specialization in accounting, from the Kellogg Graduate School at Northwestern University in Evanston, Ill. Rosen has more than 15 years of experience in the financial arena, serving in Illinois and Florida as a certified public accountant, financial consultant, expert witness and educator. She is owner of Dorothy Rosen, CPA, a public accounting firm that serves individuals and small businesses.