What can the collection agency due now?

California. Used a cash out refi to pay off a debt that had been charged off by the original creditor and sold to an outside collection who was in the process of suing me. Showed proof of payoff in court to judge. Collection agency still wants payment for court costs and interest which I have refused. If they proceed with the lawsuit and a judgement is filed what would be their next course of action?

If a judgement is filed it is just that a judgement and your wages will be garnished. It is usually not immediate but it will get done as long as you are working. Collections agencies have people that sit all day and look at judgements then skiptrace to find the debtors employer. The judgement would then go directly to the employer (at this point they would bypass you) then the garnishment would go through. If you get another job they will garnish again. Its pretty easy to get the place of employment with the internet. Hope this helps.