With living costs higher than ever, it's increasingly difficult to meet routine bills and pay off items that you may have already purchased-the car, a new roof, or a much-needed vacation, for example. The result can be overwhelming credit card debt, which may be resulting in late payment fees, and causing harassing phone calls from creditors.

Rather that being saddled with a mailbox full of bills you can't pay and charges you can't afford, you have the option of consolidating all your outstanding bills into one place, and one monthly payment. This can be accomplished easily by using a home equity loan.

Your home as your banker

A home equity loan is a set amount of money borrowed against the value of your house and paid back over a fixed period of time. Using a home equity loan to pay off your debts won't decrease what you owe; but it will shift the burden from a bevy of bills, all with differing due dates and finance charges, to one lender and one monthly payment. The result: a fixed repayment plan at an interest rate that's more attractive than the one that the credit card company offers.

There's also a money-saving bonus built into such financing: The interest on home equity loans is tax deductible. Conversely, finance charges from credit cards and late bill payments are just additional expenses.

The beauty and the beast in home equity loans

When considering a home equity loan, assess the amount that you can afford to pay each month. By taking this loan, you should be able to reduce your overall monthly payment or, at the very least, keep it the same while lowering your overall interest rates. After all, you don't want to add new debt on top of your current debt. With this knowledge in hand, you'll know what size home equity loan is right for you.

You can gain some flexibility by adjusting the length of the loan. This allows you to play around with different payment scenarios. The longer the term, the lower the monthly payment. Experts recommend a payback term of 36 months, and no more than 60 months.

There's one potential pitfall: By having access to all that money in the bank, you risk piling up new bills before your current debts are paid. The object is to use this one-payment option to pay for the past before you finance the future.

If you're serious about wanting to wipe away debt, take out that home equity loan. Then, play hide and seek with the credit cards. Hide them until you pay off what you owe, and seek "debt-free" status before using them again.