With foreclosures continuing to rise, it is no surprise that I have gotten a couple of questions from readers along the lines of:

What do I do if I can’t pay my mortgage?

Most of these folks are, of course, interested in staying in their homes. (Although the number of people just walking away — or even trashing the home before walking away — is increasing.) Here are some things you can do to increase the chances that you can avoid foreclosure and stay in your home:

1. Re-do your budget. Take a look at your expenses. Are there are unnecessary expenditures? Would it help if you didn’t *need* that big TV package, cell phone plan, to go out to eat twice a week or impulse buy? If you can cut some expenditures to save money to make your mortgage payment, do so.

2. Talk to your mortgage lender. It is a good idea to let your mortgage lender know what is happening. If you are worried about making payments after your rate resets, find out if you are eligible for a mortgage rate freeze. If you can refinance or get a loan modification, that would be helpful as well. But you may still need to do #1.

3. Consider selling. If you can’t afford your mortgage payment even with a workout, it might be worth it to consider selling. It stinks, but you may need to do it. If you can sell, you won’t have a foreclosure on your record. If the situation is dire, the mortgage lender might let you do a short sale.

The current economic conditions are making things difficult for a lot of people. One of the keys is to prepare and do what you can to plan in advance so that you do not become one of the foreclosures.