The end result of this trope in real life. Credit to Scott Jensen of Charlotte Stories.
Financial Failure taken to its logical extreme, where the bankrupt individual or company becomes worse off than they were before filing. Alternatively, they don't have to file, but can still be worse off than they previously were.
Paid It All Off doesn't apply once this trope is applied (unless the individual manages to clear all their debt or receive a big check), and the situation has long-term effects if there is no status quo.
On a side note, the reason why this trope is called "From Rags to Bankruptcy" rather than "From Rags to Nothing" is because people sometimes can still have something after bankruptcy, as opposed to having to giving up everything.
Also the end result of To Riches and Back if one's lifestyle obtained at the end is worse than they had.
Fictional examples only, please. There are too many companies that actually did file for bankruptcy to talk about here.
Examples[]
- The Simpsons: Homer once did this to Ned Flanders. Ned gets his store back eventually, though.
- Any case picked up by Larry H. Lawyer, Jr. can lead to this for the defendant, and is usually a victory for the person he's defending.
- When Homer files for bankruptcy, he's shocked when it's revealed that he has to pay his creditors all the money they're owed.
- South Park: The entire town goes through this in one episode.
- Regular Show has this happen to Couple Corral. Specifically, the company's CEO. All over Mordecai trying to get rid of his Couple Corral profile.
- The Big O gives an illusion of this at the start of season two.
- The Revocs Corporation, by the end of Ryuko's final battle against Ragyo. They went from provider of 100% of the planet's clothing to nothing by the Honnoji Academy graduation.
- Wan Wan Celeb Soreyuke! Tetsunoshin has this happen to all of the Inuyamas. Guess what the titular puppy tries to do?
- The Laughing Salesman: The 2017 version takes the To Riches and Back variant- well, technically, Moguro's victim-of-the-day usually went back to what she had before she got her credit card from him. But for a spa treatment, her lifestyle gets worse (and more horrifying) than it was before then.
- Anytime one were to meet with Moguro, this will happen (often in horrifying ways). Whether it just be a minor example in the best case scenario, to going to jail in the worst, Moguro will cause this to every single one of his victims by the end of their episodes.
- The victim of episode 12 of the original series (and his co-worker) gets fired at the end of the episode, ensuring this trope happened. The 2017 series (where this is episode 1, segment 1) doesn't even imply anything about this.
- A side note: Moguro doesn't work with anyone under the age of 20 (which is considered Japan's minimum drinking age) to avoid directly putting them through this trope. But one becomes a potential victim from the moment he or she turns 20.
- Double subversion: at the end of season 3 of Miraculous Ladybug, Chloe does an Insignia Rip-off Ritual on herself, removing everything she was wearing except her costume and Bee Miraculous, stating she'll leave France to move to New York in the process. Marionette ends up reclaiming the latter anyway after the ritual was over. The double subversion comes in when her parents decide to stay together, metaphorically leaving Chloe bankrupt.
- The toothpaste company in Charlie and the Chocolate Factory. The 2005 film averts this by having toothpaste sales rise. Mr. Bucket is put out of a job either way.
- A notoriously bad anime in the Shirobako universe was a disastrous flop, and almost brought MusAni into bankruptcy. Luckily, they narrowly avoided this trope via another anime adaptation they made.
TBA.