I think that once you realize that you can’t pay the mortgage anymore, and you miss the first payment, then why bother making any more payments? You have several months before you’re in REAL trouble, so why not save as much cash as possible and makes plans for the exit?
I suspect that’s what I would do in that situation. If you’re not paying the mortgage or the HELOC, you can save quite a bit of cash, and the payment issues probably haven’t made it onto your credit report yet, so renting a place shouldn’t be too hard.
I’ve known a couple of people that have gone bankrupt, and these people were never short of cash. Hardly a representative sample of course, but that’s been my experience. They had crushing amounts of credit card debt and phone calls from people demanding money, but they were always wearing nice clothes, eating out at the best sushi places. OK, so I’m thinking of one particular ex-girlfriend here. 😉
