The family's failure makes a wretched story (4,8)
I believe the answer is:
poor relation
'the family's failure makes a' is the definition.
I can't judge whether this definition defines the answer.
'wretched story' is the wordplay.
'wretched' becomes 'poor' (synonyms).
'story' becomes 'relation' (relation is a kind of story).
'poor'+'relation'='POOR RELATION'
Can you help me to learn more?
(Other definitions for poor relation that I've seen before include "Inferior member of group" , "Inferior person/thing" .)