Terrible lad Freud sorted out (8)
I believe the answer is:
dreadful
'terrible' is the definition.
('dreadful' can be a synonym of 'terrible')
'lad freud sorted out' is the wordplay.
'sorted out' is an anagram indicator.
'lad'+'freud'='ladfreud'
'ladfreud' is an anagram of 'DREADFUL'.
(Other definitions for dreadful that I've seen before include "Extremely bad or disagreeable" , "Dire, alarming" , "Horrible, shocking" , "Appalling, awful" , "Shockingly bad" .)