Well, there was recently a negative real shock to debt value. So the time sequence here is: time 0 = Creditor A thinks that lending $10,000 to debtor B will c

Well, there was recently a negative real shock to debt value. So the time sequence here is: time 0 = Creditor A thinks that lending $10,000 to debtor B will create an asset worth $20,000 time 1 = Horrible things happen. time 2 = Creditor A thinks that the asset thought to be worth $20,000 at time 0 is now worth only $100. It is possible -- though perhaps not likely -- for it to be the case that the average value of all loans made at time 0 to be worth less than their face value at time 0, now that we are at time 2. That doesn't mean that consumer lending at time 2 would become impossible -- it means that lenders would set rates and choose debtors such that they think that new loans have values exceeding their costs.