If you signed an income share agreement (ISA) for a coding or tech bootcamp or another career-training program and now feel you cannot keep up, the most important thing to know is that "I can't pay this month" and "I am in default" are usually not the same thing. An ISA is a contract in which you got the training up front and agreed to pay a fixed percentage of your future income for a set number of monthly payments -- but only once you earn above a minimum income floor, usually with a total payment cap and a maximum number of payments or a time limit. Those built-in terms exist to protect you, and many students forget they have them. Before you scramble to pay, borrow, or settle, work through the steps below in order.
Short answer: check your protections first, then understand default
Do these three things in order. First, read your contract and check the income floor and any deferment or forbearance -- in a month you earn below the threshold, most ISAs say you owe no payment, so you may not be behind at all. Second, question whether the ISA is a valid, properly disclosed, enforceable obligation; ISA providers have marketed these as "not a loan," but the CFPB takes the position that an ISA is credit that must follow lending and disclosure rules (see is an income share agreement a loan). Third, only if you are genuinely in default with no protection applying, the company may demand payment, place the balance with a collections agency, or sue for breach. It is a civil obligation -- there is no jail for owing it -- and only a court judgment can lead to wage garnishment where your state allows it.
Step 1: Are you actually behind? The income floor and deferment
Most ISAs are built so that you owe nothing in a month your income sits below a minimum threshold, and many pause payments entirely during unemployment through a deferment or forbearance clause. So the first question is not "how do I pay?" but "do I owe a payment right now at all?" Read your contract closely and look for:
- An income floor -- a minimum monthly or annual earnings level below which no payment is due. If your current income is under it, you may owe nothing this month.
- Unemployment deferment or forbearance -- a clause that pauses payments (and often the clock) while you are out of work or between jobs.
- A payment cap -- a maximum total you can ever be asked to repay, which may be far less than you feared.
- A maximum number of payments or a time window -- after which the obligation ends even if the cap was not reached.
Keep every document, and if the contract requires you to notify the servicer or submit income proof to invoke these terms, do it in writing and keep copies. Treating a below-floor month or an eligible unemployment period as a "missed payment" can push you into a default you did not actually owe.
Step 2: Is it even a valid, enforceable debt?
Before you accept that you owe a fixed amount, question whether the ISA is a valid, disclosed, enforceable obligation in the first place. ISA companies have long marketed these agreements as "not a loan," "not debt," or "risk-free," but the CFPB has taken the position that an ISA is credit and functions much like a private student loan under federal consumer-financial law -- which means lending and disclosure rules generally apply to it. The CFPB has taken enforcement action (consent orders) against ISA providers for deceptively representing that their products were "not loans" and for failing to provide the disclosures the law requires, and a number of state regulators treat ISAs as loans subject to licensing, disclosure, usury, and discharge rules. If your ISA is credit and it skipped required disclosures or carries terms that violate lending or usury rules, that can give you defenses or make certain terms unenforceable. Do not assume every clause is binding just because you signed something labeled "not a loan." Have a legal-aid office or consumer attorney review whether yours is enforceable as written, and report a deceptive or predatory ISA to the CFPB and your state attorney general. The is an income share agreement a loan page walks through this in depth.
Is it a crime not to pay an ISA?
No. An ISA is a civil obligation, not a criminal one -- you cannot be arrested or jailed simply for owing it or for falling behind. The worst-case outcomes are civil: collection efforts, a lawsuit for breach of contract, and, if the company wins, a judgment. An ISA is also almost always unsecured, meaning no specific asset like a car or house was pledged as collateral, so a company cannot repossess property just because you stopped paying (see the difference between secured and unsecured debt). Knowing this matters because ISA collectors sometimes lean on fear and urgency; understanding that this is a civil, unsecured matter lets you slow down and work through your options instead of panicking.
What the company can actually do
If you are genuinely in default -- meaning you owe a payment (no income floor or deferment applies) and you are not making it -- an ISA company or its servicer generally has the same tools as other unsecured creditors:
- Contact you to demand payment and report the account as delinquent.
- Place the balance with a third-party collections agency, at which point federal and state debt-collection rules apply to how they can contact you (see how does debt collection work).
- Sue you for breach of contract to try to obtain a court judgment for the amount they claim you owe.
If you are sued, do not ignore it -- failing to respond often lets the company win a default judgment automatically, even if you had strong defenses (like a disclosure or enforceability problem). Respond within the deadline on the court papers; see how to respond to a debt collection lawsuit. Also keep in mind that an old ISA balance may be too old to sue on at all under your state's rules -- see what is time-barred debt.
Can they garnish your wages?
Not just because you missed a payment. In most situations, an ISA company cannot reach your paycheck unless it first sues you, wins, and obtains a court judgment -- and even then, wage garnishment is only available where state law allows it, and a few states sharply limit or prohibit it. How much can be taken (if anything) is capped by law and depends on your state and your income. Some people also have little or no income or property a creditor can practically reach; see am I judgment proof. To understand the mechanics and the limits, read how does wage garnishment work. The takeaway: garnishment is a downstream possibility after a judgment, not an automatic consequence of falling behind.
How to resolve any genuinely-owed leftover
If you have worked through the steps above -- confirmed no income floor or deferment covers you right now, and had the contract reviewed so you know the obligation is genuinely owed and enforceable -- then the remaining, unsecured balance can often be negotiated or settled like other unsecured debt, especially once it is in default or collections. Get any settlement or payment plan in writing before you pay a cent, and keep it. One tax note: a forgiven or canceled balance over $600 can trigger a 1099-C cancellation-of-debt form from the company, which the IRS may treat as taxable income (see what is a 1099-C cancellation of debt form). For the full walkthrough, see can you settle an income share agreement, and if the balance is already with a collector, should you pay a debt in collections. Never simply walk away from a valid, enforceable ISA, and never try to hide or under-report your income to dodge it -- your lawful levers are the contract's own protections, the enforceability question, legal help, reporting deception, and negotiating the leftover.
Bottom line
Not paying an ISA does not send you to jail, and it may not even mean you are in default. Start by reading your contract and using the income floor, deferment, cap, and maximum-payment terms you already have -- you may owe nothing right now. Then question whether the ISA is valid, disclosed, and enforceable at all, since regulators increasingly treat these as credit. Only after that does the default path -- demand, collections, a possible lawsuit, and, after a judgment, potential wage garnishment where state law allows -- come into play, and any genuinely-owed unsecured leftover can be negotiated. An ISA is a distinct product from a federal or private student loan; do not assume the rules are identical. Pull your documents, get help, and act on your rights. For the bigger picture, see the bootcamp income share agreement debt guide and the CFPB.
This page is general information, not legal, tax, or financial advice. Whether an income share agreement is an enforceable, properly disclosed contract, how much (if anything) you owe right now, whether it is reported, and what a company can do all depend on your contract, your income, your state, and the facts -- read your ISA carefully, keep every document, and talk to your state attorney general, a legal-aid office or consumer attorney, and the CFPB.