If a team goes into debt, they cannot bid for players on the transfer market or invest in the academies until their balance becomes positive again.
When the weekly financial update is performed, if your youth or senior academy investment amounts would cause you to have a negative bank balance, the amounts are adjusted down, starting with the senior investment amount.
For example, lets say you have your senior and youth academy investment amounts set at $20,000 each. The financial update runs and calculates that if these amounts are applied your balance will be -$5,000. The game then adjusts your senior investment amount down to $15,000 for the week