The bank says they can work out a payment plan, is that a good choice?

It depends. I've seen some of those payment plans take a lot more time and a lot more money. Some payment plans keep the homeowner in default for over a year, with the lender still reporting late to the credit bureaus the entire time, wreaking havoc on the homeowner's credit score. They may also require payments that are 1 1/2 times the payment you were already making, so if you were already having trouble making your mortgage payment, then this doesn't bring any relief.