JG Wentworth Review: What To Know Before You Apply

Quick Take: JG Wentworth is a consumer finance company that offers a debt settlement program for consumers with unsecured debt. It may appeal to those with at least $10,000 in consumer or medical debt who have already tried other options. But debt settlement should always be seen as a last resort, not a first step.

Key Takeaways

• Best for large, unsecured balances: JG Wentworth may be most useful if you have at least $10,000 in unsecured debt and are already behind on payments.

• The fee is real money: JG Wentworth charges 18% to 25% of each enrolled debt it settles, and federal law bars any fee until a debt is actually settled and you've made a payment.

• Savings look smaller after fees: The company reports about 43% average savings on enrolled debt before fees, but after fees, projected savings drop to roughly 21%.

• Expect a credit hit: You typically stop paying creditors during the program, which can sharply lower your score, and settled accounts can stay on your report for up to seven years.

• It takes years, not months: Most customers finish in about 24 to 48 months, with roughly a 32-month average, and there's no guarantee every debt settles.

• Try cheaper options first: The CFPB recommends weighing nonprofit credit counseling and negotiating directly with creditors before paying for debt settlement.

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Pros and Cons

Pros

• Free initial consultation with no obligation to enroll

• A+ Better Business Bureau rating with more than 30 years in business

• No fee charged on any debt that cannot be settled

Cons

• Debt settlement programs can hurt your credit score, sometimes significantly

• There’s no guarantee that the program will settle all your debts

• You’ll have to pay a fee of 18% to 25% of your total debt

• Creditors can still pursue you until an agreement is reached, if ever

Company Overview

JG Wentworth is a well-known name in consumer finance, due in part to its frequent television commercials. But the company has operated for more than 30 years, offering a variety of services ranging from structured settlements to home equity cash-out options and personal loans through partner lenders.

The company's debt relief division launched in 2019 and is accredited by the Association for Consumer Debt Relief. It negotiates with creditors on behalf of customers who are struggling with paying off their unsecured debt.

The company also offers structured settlements, home equity cash-out options and personal loans through partner lenders, though this review covers debt settlement only.

Key Features

Program Fees

JG Wentworth charges 18% to 25% of each enrolled debt balance as a settlement fee. Variables that can affect the exact amount you pay include the total amount you owe and the rules in your individual state.  

Federal law dictates that no fee can be collected until you approve the terms and a debt is successfully settled. You also can’t be charged if a creditor refuses to settle.

Minimum Debt Requirement

To enroll, you must have at least $10,000 in unsecured debt. You can use the JG Wentworth program to help negotiate unsecured credit cards, personal loans, medical bills, some private student loans, collection accounts and store credit cards. Secured debts, federal student loans, tax debts or child support are not covered.

Program Length

According to JG Wentworth, you can complete the debt settlement process in as little as 24 to 60 months. This can vary based on a number of factors, including the amount of your debt, your monthly deposit amount, and how quickly you can get individual creditors to settle. 

Timeline to First Settlement

You don’t immediately settle your debts with creditors just by signing up with JG Wentworth. Typically, you have to make several months of deposits before the company can even begin to negotiate for you.

JG Wentworth settles an average of six debts per client. During the course of the program, you might have success with different creditors at different times, depending on their response time and the effectiveness of the JG Wentworth program. 

Other Notable Features

• The entire debt settlement process can have a crippling effect on your credit score. However, simply checking your options at JG Wentworth only results in a soft credit pull. Your credit won't be affected unless and until you actually enroll. 

• You'll review and approve every settlement offer before any funds get released.

• If a creditor pursues legal action against you during the program, you can hire a third-party law firm through JG Wentworth. 

• Before you start, you can complete a free phone and/or online consultation to see if JG Wentworth is a fit for your situation.

Costs and Fees

Here's how the JG Wentworth fee works.

Imagine you enroll $25,000 of debt with JG Wentworth and the company negotiates a settlement of $14,000. 

A 25% fee on the total debt amounts to $6,250.

That means you’ll ultimately pay $20,250 out of pocket, $14,000 from the debt you still owe plus the JG Wentworth fee. 

JG Wentworth reports that its customers enjoy an average savings of 46% on their enrolled debts before fees are taken out. Including fees, the total average debt reduction is 21%. On $25,000 in debt, that translates to about $5,250 in savings on average. 

These results are not guaranteed, and your case may have better or worse results.

Eligibility Criteria

You must have at least $10,000 in qualifying unsecured debt to work with JG Wentworth on debt settlement. There's no minimum credit score requirement. 

Depending on your state of residence, you may end up working directly with JG Wentworth or with a partner law firm that operates in a state where JG Wentworth does not. Before you apply, you should confirm availability in your state.

How To Apply

1. Call or go online to request a free debt evaluation. A specialist will review your complete financial situation, including your debt balances, income, and monthly expenses. 

2. Upon qualification, you’ll receive a proposal that includes your estimated monthly deposit, your estimated timeline and projected savings. 

3. Upon enrollment, you’ll have to open a dedicated FDIC-insured account and begin making monthly deposits.  

4. JG Wentworth contacts your creditors and negotiates on your behalf. You'll have the opportunity to approve or reject each offer before you make any payments. 

5. You’ll begin paying down enrolled balances each time a settlement is reached. Once those balances all reach zero, the program concludes.

JG Wentworth vs. Comparable Options

Here are two debt settlement competitors that offers similar services to JG Wentworth: 

National Debt Relief

National Debt Relief could appeal to debtors with smaller amounts to settle. It accepts consumers with $7,500 in unsecured debt, 25% lower than JG Wentworth’s $10,000 minimum. Its fees can also be lower, dropping to as little as 15%, although it shares the same 25% upper-end cap as JG Wentworth. 

After all fees are included, National Debt Relief reports average after-fee savings of approximately 20%. That’s comparable with JG Wentworth's reported 21%. National Debt Relief holds an A+ rating with the Better Business Bureau and has helped more than 600,000 clients settle over $10 billion in debt. 

Freedom Debt Relief

Freedom Debt Relief is another JG Wentworth competitor that has a smaller minimum of $7,500 in unsecured debt. It also charges 15% to 25% of enrolled debt, lower than JG Wentworth's bottom range of 18%. Something that makes Freedom Debt Relief stand out is its program cost guarantee. If your total settlement cost, including fees, exceeds your original enrolled debt amount, the company will refund the fee difference. 

Freedom Debt Relief has resolved more than $20 billion in debt for over one million clients since 2002. As with its competitors, it holds an A+ BBB rating. But notably, services are not available in certain states and areas, including Colorado, North Dakota, Oregon, Rhode Island, Vermont, West Virginia, Wyoming and Washington, D.C.

Who It's Best For

Who it's for: JG Wentworth could be an option if you have at least $10,000 in unsecured debt and you're already behind on payments.

Who it's not for: It's not a good fit for anyone who can still manage minimum payments, wants to protect their credit score or needs a guaranteed outcome. Borrowers with less than $10,000 in debt will need to look elsewhere.

Final Take

Debt settlement shouldn’t be the first option for debtors in financial difficulty, and it’s not the right option under any circumstances for some. But if you’re headed down that path, JG Wentworth is a legitimate, accredited debt settlement company with a long track record and a verified A+ BBB rating. Although costly, the company’s fee structure and program specifics are in line with the industry as a whole.

The risks common to all debt settlement programs apply here as well, including damage to your credit, the lack of guarantees and potential tax consequences on forgiven debt. 

Before taking the drastic step of enrolling in a debt settlement program, speak with a nonprofit credit counselor at the National Foundation for Credit Counseling. These experts can help confirm if debt settlement is the best path for you.

FAQs

Does JG Wentworth offer products beyond debt settlement?

Yes. JG Wentworth offers a number of consumer debt and settlement products, including structured settlements, home equity cash-out options and personal loans through partner lenders. 

Will enrolling in debt settlement hurt my credit score?

Yes. Although the process begins with a soft credit pull, once you enroll in a debt settlement program, you’re required to stop making payments on your debt accounts. This results in late payments, delinquent accounts, and other highly damaging credit actions. During the settlement process, you should expect your credit score to plummet. Creditors will also continue to aggressively pursue you for repayment. Under the Fair Credit Reporting Act, delinquencies and settled accounts can remain on your credit report for up to seven years.

How long does JG Wentworth's debt settlement program take?

According to the company, you can complete the program in as little as 24 to 60 months, although some take longer. The exact timeline depends on your total enrolled debt, your monthly deposit and how quickly individual creditors respond to settlement offers.

Does JG Wentworth directly handle debt settlement, or does it use partners?

JG Wentworth's debt settlement program is handled directly through its debt relief division, JGW Debt Settlement LLC. However, in some states, you'll work instead with a third-party law firm. Find out which option applies to your state before you contact the company.

Key Terms

• Debt settlement: A program in which a company negotiates with your creditors to accept less than the full balance you owe on unsecured debt.

• Unsecured debt: Debt not backed by collateral, such as credit cards, personal loans, medical bills and some private student loans. Secured debts, federal student loans, tax debt and child support generally don't qualify.

• Settlement fee: The percentage of each enrolled debt a settlement company charges once a debt is settled. For JG Wentworth, that's 18% to 25%.

• Advance-fee ban: An FTC rule that bars for-profit debt relief companies from collecting any fee before they settle at least one debt and you make a payment under that agreement.

• Dedicated account: An FDIC-insured account you fund monthly while the company negotiates. The funds stay yours, and the account is used to pay settlements and fees.

• Soft credit inquiry: A credit check that doesn't affect your credit score.

• Charge-off / delinquency: Negative marks that appear when you stop paying creditors during the program; settled accounts can remain on your report for up to seven years.

• Insolvency exclusion: An IRS provision that may let you exclude forgiven debt from taxable income if your liabilities exceed your assets.

Sources

• CFPB: What is a debt relief program and how do I know if I should use one?

• FTC: Debt Relief Services & the Telemarketing Sales Rule

• JG Wentworth — Debt Relief Program (first-party)

• IRS — Topic No. 431, Canceled Debt

• National Foundation for Credit Counseling

• FTC: Fair Credit Reporting Act

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