If too many people banking with the bank go into debt and don't pay back their debt the bank will run out of money.
People who rack up debt keep taking money out of the bank they don't have. Essentially, the banks money is getting spent on their big screen tvs and expensive cars. Meanwhile, their basic minimum wage job is paying them hardly anything, so they just keep taking money out despite the fact they can't even begin to pay it back. If enough people do this, and no one puts money back and everyone just keeps taking the money, the bank will have no more money left to essentially "lend out" and it'll go bankrupt. This is why banks have debt collectors and debt policies which stop stupid people who don't have brains from racking up endless debt and collect the debt they have, so that won't happen. It's not that they lose all their money, it's just they lose all the money that doesn't belong to people who have accounts there. It's just the money they need to run their whole huge banking operations that they don't have, and so they can't keep the banking running safely or efficiently enough and they have to close.