I have played OTC, but I didn't make the connection while thinking about this, at least not consciously.
Also, what you said about incentive to pay back gave me another idea. If your reputation with a faction gets too low, it should start seeking you out - but the way it does it should be related to the reasons your reputation is low in the first place. If it's debt, they'll try to confiscate any property of yours that they can get their hands on, and try to convince their allies to do do the same. This would go towards nullyfing your debt, but leave a long-lasting stain on your reputation, so it's better to liquidate and pay back before it gets to that point... or get your things out of their jurisdiction.
If it's piracy, it would be a bounty on your head instead, and so on...
Basically what I'm getting at is that reputation should be, instead of a single number, a list of modifiers, for example:
Debt (125,000 credits): -15
2 counts of minor smuggling: -4
Completed bounties: +30
The faction would take actions on each of those matters individually, so maybe that +30 from bounties makes you a licensed bounty hunter with some access to military equipment, but at the same time and independently of that your debt makes them less likely to entrust you with money, and your history of smuggling makes them pay closer attention to your actions on the markets. In extreme cases, where the net reputation reaches very low or very high values, one would affect the others - military and financial services may be unconnected, but obviously you're not going to get a loan if you've just been caught doing major piracy, and you're not going to be hassled for some unpaid tolls from two cycles ago if you've since become an important military leader in the faction, for example. This could be connected to the persistent people system we're getting, with various persons from a faction handling their own facet of the reputation system.
Probably too complex, but wouldn't it be great?