WASHINGTON — Congress is considering legislation that would allow bankruptcy court judges to rewrite loan terms for people at risk of losing their homes, a change that supporters say could save half a million borrowers from foreclosure through early 2009.

Under this plan, judges could lower the interest rate of a mortgage on a primary home, extend the life of the loan or forgive part of the debt — as they currently can for vacation homes, farms and investment properties. Doing so could reduce by a quarter the 2 million foreclosures expected in the next 18 months, according to Moody's www.Economy.com.

Of all the legislative proposals aimed at helping at-risk borrowers, this one is thought by consumer advocates to offer the most wide-reaching and immediate relief. The House has held two hearings on a bill introduced by Democratic members, Brad Miller, of North Carolina, and Linda Sanchez, of California. Similar legislation has been offered in the Senate.

Pressure for action is building as the number of foreclosures mounts. Some advocates say courts should step in because lenders are not moving decisively enough. But lenders say the bill would increase mortgage costs for borrowers and encourage some to use the courts as a cheap alternative to refinancing, causing bankruptcy filings to spike.

Stuck in the middle are borrowers like Joanna Jarvis, a private investigator, who said she could no longer afford the house she bought in Sterling, Va., seven years ago.

Jarvis, 34, refinanced her mortgage three times, most recently to invest in a car-repair business. She planned on refinancing that adjustable-rate mortgage before it reset. But the real estate market soured. The value of her home dropped. Her business foundered. And her monthly payment jumped to $5,000 in August, from $3,600.

Jarvis said she turned to her lender for help, provided all the documents the lender requested and kept up with her payments as long as she could. But she never heard back from the lender.

"I've got no more energy to fight with the lenders," Jarvis said. "I'm ready to go in front of a bankruptcy judge and say, 'I tried.' "

At issue are Chapter 13 personal bankruptcies, which immediately halt foreclosure sales and freeze all collection actions for debts that predated the filing.

The court then approves a repayment plan that determines which creditors get paid and when.

Under this arrangement, a person has three to five years to make missed mortgage payments.

But while trying to make good on past debt, filers must keep up with their regular mortgage payments and other expenses.

These days, that may not make financial sense because so many people are upside-down on their mortgages, meaning they owe more on the home than it is worth. Jarvis, for instance, owes $536,000 on a house she says is now worth less than $500,000.

"Many of those people are just walking away from their houses," said Nancy Ryan, a bankruptcy lawyer in Fairfax County, Va. "There's nothing in the law as it exists today that would make it feasible for people to keep their houses."

To help those borrowers, the bill would allow judges to reduce the principal of the loan to the home's "fair market value." The rest would be treated as unsecured debt, and the borrower could end up paying little or none of it.

Lenders say investors pumped money into the mortgage market knowing each loan they funded was secured by an asset — the home.

Allowing judges to change the loan terms would create uncertainty about that asset's value. To offset the risks, lenders would demand larger down payments, charge higher interest rates and get more picky about borrowers, said Kurt Pfotenhauer, of the Mortgage Bankers Association.