With the new, tougher bankruptcy laws in effect, people are looking for alternate bill consolidation, loan consolidation and credit card consolidation solutions. Debt consolidation loans are one of the most popular ways for homeowners to consolidate their debts by means of mortgage refinancing (replacing an existing first mortgage with a new one), taking out a home equity loan (second mortgage) or taking out a home equity line of credit (HELOC). But, be careful to consider these pros and cons before signing on the dotted line.

Pros

? Interest paid to a mortgage may be used as a tax write-off, but, according to Bankrate.com, it could be limited in some situations.

? You have one payment to make versus many payments. This makes managing your finances easier because you'll know just how much you need to pay each month, and there's only one creditor to deal with versus many.

? The interest rates for home equity loan (second mortgage) and refinanced first mortgages are lower than most credit card interest rates.

Cons

? It generally takes longer to pay off a debt consolidation loan and it?s more expensive long-term. Even though interest rates on a debt consolidation loan are lower, you're paying it for 10 to 30 years.

? You could end up in more debt than you already are. Chris Viale, general manager of Cambridge Credit Corp., a nonprofit credit counseling agency based in Agawam, Mass, says, ?70 percent of Americans who take out a home equity loan or other type of loan to pay off credit cards end up with the same (if not higher) debt load within two years.?

? If you can't keep up with the payments, the lender can foreclose and take your home because your home secures the loan.