Was in debt (4)
I believe the answer is:
owed
'was in debt' is the definition.
('they owed' means 'they were in debt')
This is the entire clue.
(Other definitions for owed that I've seen before include "Had an obligation to pay" , "(Sum) due for payment" , "Had a duty to pay" , "to be paid" , "Was obliged to pay" .)