People will default on debts when they become insolvent, and those who lent out Bitcoins have no choice but to take their losses, and maybe default themselves if they have debts as well. If those defaults happen gradually at the correct moment, when the debt has obviously become a 'bad debt', it's not necessarily a large scale problem. It becomes a large scale problem if deception is used to delay necessary defaults, because the bubble will build up and the eventual burst will be far more damaging to anyone directly and indirectly involved in the chain of bad debt. In the current fiat system, that's basically everyone. In Bitcoin, those who have their coins on the blockchain itself rather than in a bank or an exchange are not affected, because actual real Bitcoins on the blockchain is not debt-based money.

All creditors to those who default get screwed over. That's why the banks are considered 'too big to fail'. Everyone with savings in banks is a creditor to that bank, and that's the majority of the first world's population. If those banks default, all those people lose their savings. Not only that, but financial infrastructure is also dependent on those banks. Printing money is not a solution, it devalues the currency and will eventually backfire. In the long run it destabilizes the monetary system even more, causing a big swing from deflation to hyperinflation.

That's why having your life savings in fiat currency is dangerous, especially if it's on the balance sheet of a bank. I'm not saying people should throw it all into a crypto-currency, but definitely diversify. Real-estate, gold, silver, crypto, you name it.