This may be Johari Reeves' last chance to catch up on her mortgage payments. The credit cards, she'll worry about later.

We fell behind (with the mortgage) and twice we agreed to new repayment schedules that didn't work out, said the 31-year-old, a compliance officer at a small bank on Chicago's blue-collar South Side. It's been a lot of stress. But this time, if all goes well, we should be able catch up.

In August 2006, Reeves and her husband bought a $214,000 home with almost no money down, leaving them with a monthly payment of $1,636 -- higher than they planned on, especially with her husband's furniture sales job largely commission-based and business not good due to the U.S. housing slowdown.

An attempt this spring at refinancing with another lender fell through, leaving them behind on payments and struggling.

But as part of her efforts to avoid defaulting on the mortgage, Reeves said she has maxed out all her credit cards, spending to the limit on basic needs. Now all I'm doing is making the minimum monthly payments.

According to nonprofit groups providing debt counseling to home owners, more Americans like Reeves risk being swept up by the next wave of home owners to default on their mortgages.

The reason? A second debt mountain on top of the first.

Rising mortgage payments and tighter lending standards for refinancing amid the subprime credit crisis have dried up once-easy access to home equity loans for many middle-income borrowers -- so desperate borrowers are using credit cards to cover basics while trying to keep up with home payments.

When credit conditions dry up, marginal borrowers turn to plastic, said Merrill Lynch North American Economist David Rosenberg. We're seeing signs of that already.

In an October 5 research note, Rosenberg called rising credit- card delinquency rates as the next skeleton in the closet.

It is one scary skeleton -- and a specter of bankruptcy.

The problem with using credit cards -- with their high interest rates -- to stave off default brought on by reset adjustable mortgage interest is that it merely postpones an inevitable crisis, said Gregary Brown, social policy director at Metropolitan Family Services in Chicago.

Our biggest concern right now is that there are lot of people who will face a choice between bankruptcy or foreclosure, he said. Either way, it's going to suck.

HOLDING OFF THE TIDE?

Nancy Barba -- a financial counselor at a local community group, the Resurrection Project -- helped Johari Reeves negotiate her latest attempt at a repayment schedule for her mortgage.

The credit cards will be a problem later, Barba said. But right now, the main concern is the house.

Barba and other counselors said people from a broad range of income levels were facing similar problems with their credit cards, especially those with adjustable rate mortgages.

We're not just talking to people with subprime loans but also people who bought homes almost out of their range struggling with a higher mortgage rate, said Cate Williams at Money Management International, a nonprofit group.

They're now using plastic to pay for basics like gas and food and are running into trouble, she said.

U.S. Federal Reserve data for August showed revolving consumer credit, mainly credit and charge cards, rose $6.14 billion, or 8.1 percent, to $915.47 billion -- the highest monthly increase seen since the second quarter of 2006.

More worrying, said Merrill Lynch's Rosenberg, were Fed data for credit-card delinquency, which hit a three-year high in the second quarter of this year.

The next worry? The U.S. holiday retail spending season is rapidly approaching and, according to Rosenberg and others, this could push many home owners over the edge.

People are stretched thin even before the holidays, said Geoff Smith, project director at Woodstock Institute, a Chicago community development group. If they spend a lot, about three months after Christmas when the bills and mortgages are past due, we could see a rise in delinquency and foreclosures.

Although the 2005 U.S. Bankruptcy Abuse Prevention and Consumer Protection Act made it more difficult to file for bankruptcy, John Talmage of nonprofit group Social Compact predicts: We should see a spike in bankruptcy applications.

Mortgage