Everyone was in debt, it is conceded (7)
I believe the answer is:
allowed
'conceded' is the definition.
('allow' can be a synonym of 'concede')
'everyone was in debt' is the wordplay.
'everyone' becomes 'all' (all people).
'was in debt' becomes 'owed' ('they owed' means 'they were in debt').
'all'+'owed'='ALLOWED'
'it is' is the link.
(Other definitions for allowed that I've seen before include "Gave permission" , "permissible" , "Given the chance" , "Permitted and granted" , "Acknowledged" .)