People refinance mainly as a way to consolidate debt only. The equity is used to reduce their payments each month. Many individuals can't pay their debt repayments in their due time. The late fees and other penalties only increase the debt. A debt consolidation loan can be used to repay the debt in a single once monthly payment. Occasionally there are multiple credit cards with different interest rates. You could take a debt consolidation loan and pay all your credit card dues. The rate of interest of a debt consolidation loan is certainly lower than the interest rates of credit cards. The payment every month in a debt consolidation loan reduces gradually making the payments easier for the borrower. In this case the borrower has to pay back only one lending institution. But the payments must be made on time.

There is another way of paying back loans taken from multiple institutions.  A debt consolidation loan is taken and the agency makes arrangements to pay back the loans to the appropriate lenders in the definite time.  In this case care has to be taken to make sure that the payment is made promptly to the debt consolidation agency.   

Debt consolidation refinancing is another method to repay the mortgage.  The balance of the mortgage is determined and the amount you need together with the closing costs are added up and the total amount given as loan.  The value of your property is appraised and Loan To Value is calculated.  You could then borrow even up to 100% of the value of the home as loan.   

A lot of people in America are so much under debt that bankruptcy has become a process to save one's skin from debt.  This system is not good at all, as it is only leading to more suffering for the lender and to the borrower.  When a person declares that he's bankrupt, he loses nearly all his assets and it will take quite some time to recover.  In the United States over a million people filed bankruptcy every year and the number seems to be rising. 

Bankruptcy should be your last resort.  The Bankruptcy Mistreat Prevention and Consumer Protection Act make life hard for common people of America.  They find it difficult to file for a chapter 7 Bankruptcy.  A breathing space could be obtained by a bankruptcy filing.  There is a time between filing and discharging the bankruptcy papers.  You can use this time successfully to think over.