It could be disastrous when IOU runs out (7)

I believe the answer is:

ruinous

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'it could be disastrous' is the definition.
The definition suggests a singular noun but the answer is not.

'iou runs out' is the wordplay.
'out' is an anagram indicator (out can mean wrong or inaccurate).
'iou'+'runs'='iouruns'
'iouruns' anagrammed gives 'RUINOUS'.

'when' is the link.

Can you help me to learn more?

(Other definitions for ruinous that I've seen before include "Tumbledown - expensive" , "Broken down" , "Causing destruction" , "Disastrous, destructive" , "Devastating - dilapidated" .)

I've seen this clue in The Globe and Mail.

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