I am at a loss to come up with any other explanation than those folks were over-leveraged, which in my book does not count as "doing everything right". Flipping houses is about all I can come up with, but there plenty of people more creative than I am about taking on debt.

So, being "negative" means someone is owed money. How does one do that with >1MM net worth? You sold everything, and still owe people money? You either weren't really a millionaire to begin with, or you were over-leveraged (which means you probably weren't really much of a millionaire to begin with).