[ETHIC:EXTREME_DEBT: SITE_LEADER_DISCRETION] < Default for dwarves, likely PUNISH_EXILE for humans, PERSONAL_MATTER for goblins, kobolds, and animal people, and PUNISH_REPRIMAND for elves.
Modded races with UNTHINKABLE (or PUNISH_CAPITAL of course,) would probably routinely have debtors executed, making such a race reliant on player input to keep everyone paid enough to avoid such a fate, but modded races are neither here nor there.
From there, they're added to the criminals tab if there's law enforcement and you can choose an appropriate punishment, or if lawdorfs aren't in place, the Mayor/Upper Noble in charge makes one based on personality - a more merciful or compassionate dwarf may simply put them on the backlog for a month in jail, while a dwarf who values martial prowess greatly may make them join the military, or particularly cruel site leader or those who have a grudge with the debtor may even have the debtor executed or beaten.
It definitely makes it useful to have a Sheriff or Guard Captain handy beforehand in the event the recent electee or whatever turns out to be a bit of a dick who would have had everyone slated for beatings for when the guard is established.
In particular, Extreme Debt can have an option for having thier negative balance removed (resetting it to 0,) in exchange for military service for x number of seasons as stated above (after the term of service you can discharge Urist McDebtor from the duty roster at your leisure, but he can't be replaced or discharged until that time's up,) in which case the punished dwarf is automatically assigned to the first squad with open space.
It would start with the militia commander's squad then going down the list of sergeants, but If no squad slots are available, they're automatically made a militia captain.
Whether or not they'd see actual battle is up to the player of course, with some players likely using it as a get-out-of-jail-free card for favorite dwarves while others (especially those like myself who prefer to deal with enemies with the
deadliest weapon traps of all,) will be sending Urist McChicken the Debtor headlong into combat with the other troops.
Likewise, site leaders who habitually have dwarves beaten, executed, or jailed for an inordinate amount of time may find thier office in danger.
Lets say Assault has a value of 100, then jailing belligerent dorfs who punch people randomly for 100 days is considered the max acceptable length before people start getting irritated at the "unusually long jail sentence given to a friend/relative/Acquaintance recently," while less law-abiding dwarves start getting bad thoughts around law dwarves ("Annoyed/angered by the presence of a fortress guard/the hammerer at a party" for example.)
If the site leader continues to be a shithead, then several dwarves may simultaneous trigger "Conduct Meeting," with the site leader and once all of these dwarves are in the site leader's office, they will with an announcement, depose him and replace him with one of the group - "For his poor leadership, a group of angry citizens has removed Urist McShitheadMayor and replaced him with Urist McNiceLyeMaker!" Likewise, the same may happen if there's a severe shortage of a necessity for long enough after the economy activates.
A shortage of unworn or only xShoesx for example, would constantly irritate the populous and eventually (say, two years of only having XShoesX or footwear in worse condition for 60% of the population or more,) they'll snap and replace the mayor or baron, the replacement being the one who will then immediately mandate at least half the population's worth of the needed item over the course of a season or two if not replaced or killed, firing out production mandates for the item as rapidly as the new guy can.