The collections department of a local merchant is harassing me. Can I do anything about it?

Unfortunately, the federal Fair Debt Collection Practices Act (FDCPA) does not apply to the collection department of a creditor (it only applies to outside collection agencies). However, many states have laws on fair debt collection that do cover these collection departments. Check with your state consumer protection office to see if your state law applies to in-house collectors and to find out what types of collection practices it prohibits.

How should I deal with a debt collector who is not abusive?

Unless you're judgment-proof or truly plan to file for bankruptcy, most credit counselors believe that you shouldn't ignore your debt or try to hide from a debt collector. Generally, the longer you put off resolving the issue, the worse the situation and consequences will become. Whether you negotiate directly with the collector or obtain a lawyer's assistance, most counselors feel it is almost always best to talk with the collector and work out a mutually satisfactory arrangement.

A bill collector insisted that I wire the money I owe through Western Union. Am I required to do so?

No, and it could add more money to your debt if you did do it. Many collectors, especially when a debt is more than 90 days past due, will suggest several "urgency payment" options, including:

• Sending money by express or overnight mail. This will add at least $10 to your bill; a first-class stamp is fine.
• Wiring money through Western Union's Quick Collect or American Express's Moneygram. This is another $10 waste.
• Putting your payment on a credit card not charged to its maximum. You'll never get out of debt if you do this.

Can a collection agency add interest to my debt?

Yes. The FDCPA allows a collector to add interest if your original agreement calls for the addition of interest during collection proceedings or the addition of such interest is allowed under state law. Every state authorizes the collection of such interest.