I'm curious to know, how much creditors (credit card companies, mortgage companies, etc) get paid by the collection agencies when they sell the bad debt? Does it vary by the type of debt or is there a general rule of thumb they use when deciding what to pay? I've heard it can go as low as 10% but can be as high as 60% depending on how "collectable" it is. The reason I ask is because my mom has a 2nd mortgage on her house. She's worked out a modification on the first mortgage (final next month) but still has a $50k outstanding 2nd. Considering both balances, her house is currently $120k under water. The lawyer for the bank said they're pretty much treating the second as uncollectable bad debt and it will be sold to a collection agency for a percentage of the balance. They will then try to collect more than they paid for it to try to turn a profit. She hasn't been contacted yet, but I'm trying to get an idea of a baseline to start offering a payoff. If a reasonable amount can't be negotiated, she will probably wind up filing bankruptcy. Thanks in advance for any information. Thread-crappers and those who want to call names and pass judgment with stuff like "pay your bills", "don't buy what you can't afford" and "don't be a deadbeat" kindly click the back button instead of reply. Thanks and buh-bye.