How would you answer that question in 300 words or less? Here is my take on it ...
Simpy put, we are fallen people living in a fallen world. There are four sources of our suffering in the world.
1. Our own sins or bad decisions. If you pick a fight with a guy twice your size, God will generally allow you to suffer the consequences of your choice.
2. Other people's sins or bad decisions. Someone broke into our van and tried to steal it two years ago - we suffered the consequences of their sin.
3. The general fallenness of our world. Sickness and disease are (usually) not the consequence of sin or poor choices - but rather a feature of our fallen world.
4. God testing or refining us. (E.g. Job 1-2; 1 Peter 1:6-7)
Bad things will happen to the righteous and the unrighteous alike. God grieves for our pain along with us (John 11:35); but His primary concern is how we deal with trials. In the midst of suffering, how should we respond?
1. Continue to glorify God. (Job 1:20-22) Praise God for the life and salvation He grants; be thankful that even amidst suffering, God is sovereign.
2. Search your heart, and confess any hidden sin. (Psalm 139)
3. Examine and imitate Christ's example. Jesus walked the road of suffering before us (Matthew 26:31-46; 27:11-56), and warned that His followers would also face trials (Matthew 5:10-12).
4. Meditate on the eternal promises of God. Fix your eyes on the eternal life that God promises through faith in Jesus Christ (2 Corinthians 4:16-18).
5. Remember that God walks through suffering with you, and you are never left on your own in the midst of hurt (Hebrews 13:5; Psalm 23:4).
6. Cherish God's assurance that one day, all will be set right. When God recreates the heavens and the earth (Revelation 21:1-5; 22:1-5), the sickness, pain and death that mar our fallen world will be forever removed. Then bad things will no longer happen to God's people.
To read more ... check out C. S. Lewis, The Problem of Pain; and Philip Yancey, Where is God When It Hurts?