Financially embarrassed? That may be exaggerated (9)
I believe the answer is:
overdrawn
I believe this clue is a double definition.
'financially embarrassed?' is the first definition.
'exaggerated' is the second definition.
(I've seen this before)
'that may be' acts as a link.
(Other definitions for overdrawn that I've seen before include "venturing into red" , "The big spender's account may be so" , "Using too much crayon" , "account discredited" , "got into debt" .)