From the manual:
If you go into debt, you will be charged a 5% penalty each week until you are positive again at the time of a economic update. If you drop below -$500k, you must get out of debt within two weeks or your key players will be put on the transfer list at a starting price of zero. If after selling your players you are still not out of bankrupcy, you will be fired as manager at the next economic update. Bankrupcy is calculated first in the economic update and active bids on your players do not count as money you have to avoid bankruptcy.