There are three basic types of equity loans:

• A term (or closed-end) loan, or a line of credit on your equity is technically a second mortgage. They are usually for a shorter term than the mortgage you used to buy your home in the first place, typically with a life of five to 15 years.
• A term loan is a one-time lump sum with a fixed interest rate and the same payments each month. Once you get the money, you cannot borrow further from the loan.
• A home equity line of credit (HELOC) is more like a credit card—yet another one. You can borrow up to a certain amount for the life of the loan, and even withdraw money as you need it.

Dolan Smart Money Move : We don't believe in using your home as a piggy bank, so we're not fans of HELOCs. If you must borrow using your home as security, get a fixed-rate loan. That way there will be no interest-rate surprises for the life of the loan. Check www.bankrate.com for the best rates in your area.

3. Your Retirement Account: Your IRAs, 401(k), 403(b), etc. In eight little words: DO NOT USE THIS ACCOUNT TO PAY DEBTS. But if you're totally stuck, as a last-ditch effort before bankruptcy, you might tap into a retirement account. Some people think, "I've got this 401(k) at work and I'll use it to pay off my debts." Don't do it unless it's absolutely your only alternative to bankruptcy!

Know Your Rights

This is still America and no one ever goes to debtors' prison. Even if you are in serious debt, it is illegal for a debt collector to inform your employer or neighbors about your debt, call you late at night or at work, or engage in any other form of unfair harassment. If someone does hound you, call and write to the Consumer Protection Office of the attorney general in your state and report the calls. This office should contact the outfits that are after you. At the very least, you can tell the next collector who calls that you know this is illegal harassment and you've reported it; then send them a copy of the letter you sent to the Consumer Protection Office.

No matter what your situation, don't give up! We've heard countless stories of people who have climbed their way out of debt. We've done it ourselves and we know you can do it, too. But you have to get started today. Don't wait any longer. Read back through our advice, decide on your first step, and take action.

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