Before a person considers other alternatives to FORECLOSURE they should work with a credit counselor and their lender(s) to see if there is any way the can consolidate their debts to make their payments more affordable.  Possible alternatives are refinancing their current home or other property that may have equity they can use to pay off higher interest rate credit or existing loans on the property.  Credit counselors can also help the person pursue credit card consolidation or work outs with the credit holders to reduce interest rates and payments.

Often, people have already exhausted their other assets and extended their credit sources to the maximum trying to keep current on their mortgage(s) and other credit.  In this case there may be little that can be done--but it is good to review this option in case there may be a way to further consolidate debt or have their lender agree to a refinance!  Some loans have a refinance option available up to 125% of the market value oof the property! The new HARP program, Homes Affordable Refinance Program, has provisions for this type of refinance (see this link for more information on this porgram.

Lenders will at times work with a borrower in financial trouble who has fallen behind with their payments by working out a "FOREBEARANCE" on the back payments, tacking them onto the end of the loan.  This is quite possible if the reason for the financial difficulty is passed and the borrower just needs relief from all the back payments that have accured. 

In the Loan Modification and the HAMP, Home Afforable Modification Program, sections (click on links) more information is given on programs available to help homeowners to modify their loans to resolve their financial distress.