Recourse and Banks

We thought we were protected from Debtor's Prison. If the value of the collateral falls below the balance of the loan, what recourse does the lender have? Let's use an example: I need ten dollars. I ask you to loan me ten dollars, and offer to put up my fancy card room table as collateral. The table is worth a hundred dollars, I say. So you loan me the ten dollars, I sign a Promissory Note, promising to pay you back in one year, with interest at 1% per month, 12% per annum. So a year goes by, and I tell you I bet the 10 bucks on the ponies and lost it all. You come to take the table, and it turns out to be a folding table worth five bucks at a flea market. You repossess the table, but are still short the interest I owe, and the rest of the loan. What recourse do you have? Hey, you already took the collateral, now what? You sell my payable to a collection agency, or place a personal lien against my name that ruins my credit. So, I am out the table, the ten bucks is long gone, and now I cannot get another loan until I pay you the now fifteen dollar balance (what with late fees and penalties and all). But what if the collateral is your primary residence? Don't homeowners have an exemption from being chased to the ends of the earth by Lenders after foreclosure? Not hardly. We Californians are protected somewhat by statute, but only to the extent that the loan was used the PURCHASE the home. You default on an Equity Line, they come after YOU. You default on a refinance, they come after YOU. I am not sure how many of these types of personal liens are being pursued right now, but rest assured, Bankers are not famed for their compassion.