Let us speculate a bit further and perhaps coalesce multiple debtors, repackage their debt, create a debt-repurchase-vehicle that would purchase a tranche at a significantly lower cost than face value? Someone should really start securitizing that market from the other side!

You forgot the value of interest, which invalidates your calculation.

If the market price of consumer debt was, on average, lower than its face value, nobody would make loans to consumers.

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.

If you purchase your own debt, then the lender has just extracted payment from you for $0.