Television sitcoms teach people to take a seemingly minor experience and explode it out of proportion. This trope is generally done through miscommunication, omission, and misunderstanding. While it is funny to watch (even while we roll our eyes at the ridiculousness of it), it is not so fun to live.
Catastrophizing is taking a small problem or obstacle and making it bigger than it actually is, thus giving the person an excuse to be paralyzed by fear, doubt, and encourage procrastination and failure.
Recently, I reached out to an insurance broker looking for liability insurance for a new business. A week later, I was told that several underwriters refused and that there is some difficulty because of the type of business it is. My immediate thought, “I’ve spent all the money on equipment, software, marketing, and now I’m never going to be able to get liability insurance. I’m going to go broke!”
That is catastrophizing. I jumped from some difficulty getting insurance to practically living on the streets! This type of thinking is pushed by our inner voice and fear. Taking a step back and deep breaths help.
Thinking the worse and driving that bus to some crazy life-ending conclusion means that possible solutions and alternatives don’t get to emerge. Even worse, this type of thinking means wallowing and eventually stopping.
The next time you feel the need to take a small issue and turn it into an end-of-my-life scenario ask yourself the following:
Is it really that bad?
Are there other solutions or alternatives?
Am I using this as an excuse to stop?
Am I being dramatic to call attention to myself?
Don’t be upset if you’ve answered the last two ‘yes.’ Understand that catastrophizing is a learned behavior, be aware of its’ influence, and wean yourself off.
Motivational Candy 
I wrote a post similar to what you described. It’s like having a nuclear reaction to a firecracker level of explosion.
Yep! I know in my family, we were encourage to be dramatic. It was a hard lesson to unlearn.
It certainly can be for sure. I think some people strive for the dramatic as it helps to keep them at the centre of attention, even it is negative. At least some I know anyways.