Actually, I know the definitive answer to this as I've recently had this occur in one of my games.
I had a brand new sim who fancied himself an inventor. After reaching level 5, he realized that the junkyard just wasn't meeting his needs, so he went and blew up the jet fighter statue at the military base. He got off with a warning, and happily went to his "home" (which was little more than a vacant lot at the time) and got to work. Some time later, he started getting low on scrap again so he went and blew up the statue in the park. Even though a good deal of time had passed, he got fined for blowing it up.
This angered him, and triggered a mad-bombing spree across Sunset Valley. While he was busy racking up fines, I noticed that the jet fighter statue had been replaced in front of the military base. I figured that he might as well go for broke, so he returned to the scene of the original crime and blew it to smithereens again. Let me tell you: that statue is very expensive. The fine was somewhere in the neighborhood of $38,000.
Satisfied that his honor had been fully avenged, he returned home and checked the mailbox to see how much his reckless behavior would set him back. The price tag was well over $100,000...a bit out of range for a single, self-employed inventor. He didn't have much to begin with, but he needed everything he did have. Such a sad day for this poor, misguided individual to be sure.
A couple days later, I got a notice that the repo man was coming to literally take everything this poor guy owned. I decided that he wasn't going to go without a fight, so as soon as I got that message I entered buy mode and put everything into the family inventory. If "the man" wanted his stuff, he was going to work for it.
The repo man showed up to the house a little while later. He walked to the mailbox, stood there for a few sim minutes and walked back to his truck and left. The bills were gone, and I spent a very short time pulling his meager belongings out of the family inventory and placing them back where they were.