John lived a normal life until the death

[Bassim]

Have I made any mistakes?

John lived a normal life until the death of his parents, but with their departure, everything changed. He started drinking and came to work late, which in the end led to him losing his job. He mortgaged his flat to open a restaurant, but when it closed down, he even lost his home. People who knew him before, couldn't believe their eyes when they saw him at the entrance of a mall. A dishevelled, smelly man with a large stomach asked them for some spare change. He was gloomy, but when someone recognised him and called his name, his grey eyes would liven up as if waking up from a dream.

 

[teechar]

but when it closed down, he even lost his home.

That can be phrased better.

People who knew [Is that the best tense here?] him before couldn't believe their eyes when they saw him at the entrance of a mall - a dishevelled, smelly man with a large stomach [STRIKE]asked[/STRIKE] asking them for some spare change. He was gloomy, but when someone recognised him and called his name, his grey eyes [STRIKE]would[/STRIKE] livened up as if waking up from a dream.

 

[Bassim]

Would it be OK to say "but when it went bankrupt, he even lost his home" ?

The simple past was wrong. It should be the past perfect.

"People who had known him before couldn't believe their eyes when they saw him..."

 

[Tdol]

until the death of his parents, but with their departure, everything changed.

How about:

until the death of his parents, when everything changed.