Owning a home is the dream of many American families. For most families, a mortgage is necessary to achieve that dream. However, a mortgage is still a debt that, in difficult financial times, can put families in significant financial hardship. This can lead to the need for debt relief to try to save their home or save their finances.

Californians have recently seen a decrease in both credit card and mortgage debt. In September, California residents owed an average of $302,850 on their mortgages. Last year, that number was higher: $315,199.

Homeowners throughout the state have also seen a drop in credit card debt. Average credit card debt in September was $5,427. Last year, it was $6,326.

Nationally, the average mortgage balance was $168,268. The average person also owed $5,409 in credit card debt.

Mortgages allow families to borrow against the value of their home to pay for the home. But in recent years, where housing prices have dropped, many families owe more on their homes than they are worth.

Bankruptcy is one option if an individual is struggling with mortgage or credit card debt. Bankruptcy will allow the individual to restructure his or her debt or possibly eliminate it altogether.

Filing for bankruptcy should not be taken lightly and requires a plan. Since Congress changed the bankruptcy laws in 2005, many individuals now do not qualify for Chapter 7 bankruptcy, which allows the individual to eliminate debt. More often, the only bankruptcy available is Chapter 13, which does not allow elimination of debt but the restructuring of debt. Nevertheless, restructuring can still be a helpful tool in getting out from under mounting debt.

Source: Sacramento Business Journal, "Sacramento's average mortgage debt falls," Melissa Wiese, Oct. 11, 2012