The most common and most likely answer to this crossword clue is the 7 letter word DILEMMA
I've seen this crossword clue in The Guardian
D
I
L
E
M
M
A
More clues leading to the result DILEMMA
- Problem with novel after cover's bent back
- Recoiling, cover heroine's spot
- Cover up girl's doubtful state
- Cover up novel problem
- Policeman left girl: that’s the problem
- Puzzle upset cover girl
- Cover up Austen character’s horny thing?
- It’s a problem to raise hat to a girl
- Cover up work of 22 across that’s problematic
- Problem raised in middle of eating fruit? Not on
Buddy explains!

The straight part
We know that "that’s problematic" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case that’s problematic = dilemma.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does DILEMMA mean?
DILEMMA noun- A circumstance in which a choice must be made between two or more alternatives that seem equally undesirable.
- A difficult circumstance or problem.
- A type of syllogism of the form "if A is true then B is true; if C is true then D is true; either A or C is true; therefore either B or D is true".
- Offering to an opponent a choice between two (equally unfavorable) alternatives.