For many people, filing for bankruptcy is seen as a scary, worst-case scenario, but consumer advocates say this last resort could be a real help for beleaguered homeowners.

Under current Chapter 13 bankruptcy law, courts cannot modify the mortgage on a principal residence, though they may for vacation or second homes. Consumer advocates and others see bankruptcy, which is meant to adjust debt and make it easier for people to repay creditors over time, as an efficient and established method for troubled homeowners to make good.