The repossession took place because the borrower couldn't keep up the payments due to the recessionary economy.

The reason there's a deficiency is that the collateral (perhaps a car if car payments were being made) isn't sufficiently valued to cover the remaining balance of the debt. This also is a low valuation situation caused by the recessionary economy making used cars hard to sell at value.

The lender knows already that the borrower can't handle any more expenses and bills. This places the lender in a position where a settlement is the best he ever can hope for.

It's rumored that a one-half settlement for a deficiency balance normally is acceptable immediately, even if installments have to be made in order to reach that one-half amount, say within 12 months.

At least then the lender is getting something, which is better than the nothing he'd get if he ever, illogically, tried for the full amount.