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The holidays are over and 2007 is in full swing, as bills from all that merriment pile up on the desk. Don't succumb to a raging panic about how you're going to pay them off, or make the colossal mistake of borrowing more to dig yourself deeper into debt. Instead, consider a strategy of debt consolidation that takes advantage of a home equity loan or mortgage refinance. Here's how:

• To motivate yourself, consider the payback. If you're servicing credit card or auto loan obligations to the tune of 16 percent, and you use an eight percent fixed rate loan to pay them off, you automatically double your savings by slashing 8 percent off the interest payments. You may incur incidental closing costs along the way, but it will still dramatically reduce your overhead. If you're plagued by high monthly payments, stretch your payments out over time to add breathing room to your household budget.
• Apply for a mortgage refinance. You can use a "cash-out mortgage refinance" to walk away from the closing table with extra cash in your pocket, which gives you savings plus cash flow.
• Take out a debt consolidation home equity loan. Use a fixed rate home equity loan to pay off your adjustable rate debts, and then you don't have to worry about drowning in a sea of steadily rising interest payments.
• Factor in tax time perks. Interest paid on consumer loans is not tax deductible, but mortgage interest usually is, depending on your tax situation. Deductions are even available for HELOCs and for the points paid for a mortgage refinance. Check with your tax advisor to calculate the additional savings that debt consolidation home equity loans provide.
  

After you restructure your debt and discover how good it feels to shed those extra pounds of red ink, pat yourself on the back for a job well done. Celebrate the New Year all over again-in a wholesome way-by socking away the savings.