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JG Wentworth is a financial services company that negotiates on behalf of consumers to lower how much debt they owe to their creditors.
In this review, I’m going to cover how JG Wentworth’s debt settlement process works, what pros and cons to consider and how to qualify.
But first I want to be clear: Debt settlement is risky. There’s no guarantee of success, and it can seriously damage your credit.
Debt settlement may be an option for those severely overwhelmed by debt. Before opting into a program, BW recommends exploring other ways to get out of debt, like enrolling in a debt management plan or applying for a debt consolidation loan.
JG Wentworth debt settlement at a glance
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Minimum debt required to enroll:
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$10,000.
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Types of debt eligible for enrollment:
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Unsecured debt, including credit cards, personal loans, collection accounts and some student loans.
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Settlement fee:
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18% to 25% of the total debt enrolled.
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Account fees:
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$9.95 one-time setup fee.
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How long it may take:
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32 months, on average.
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How much you may save:
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21% of enrolled debt after fees.
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Availability:
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Not available in: West Virginia.
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How does JG Wentworth’s debt settlement program work?
When you enroll in debt settlement with JG Wentworth, you’ll need to stop making payments on your debts, if you haven’t already.
This is common in debt settlement, and the thinking is that by not paying, your creditors will be more likely to accept a smaller lump sum (known as a settlement offer) since they’re worried you may not pay at all.
Instead of paying your debts, you’ll make a monthly payment into a third-party escrow account. JG Wentworth will help you set up this account and determine your monthly payment amount. This account is FDIC-insured, and you own it completely.
As money accumulates in the account, JG Wentworth begins the negotiation process. Once a creditor agrees to a settlement offer, you’ll pay the creditor from the escrow account. The debt is then considered settled.
It takes 32 months, on average, for customers to complete JG Wentworth’s debt settlement program.
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Nerdy Tip
Debt settlement companies often list projected savings on their website. These percentages vary significantly and may not include fees, so take them with a grain of salt. JG Wentworth told BW that customers can expect to save 21% of their enrolled debt after fees. That means if your enrolled debt is $25,000, you could save $5,250. Projected savings are never a guarantee.
How much does JG Wentworth debt settlement cost?
The biggest cost of debt settlement is the settlement fee. JG Wentworth’s debt settlement fee is 18% to 25% of the total enrolled debt and may be based on multiple factors, including your state of residence.
Here’s how the settlement fee works: Let’s say you enroll with $25,000 in credit card debt, and you’re able to settle that debt for $14,000. You might pay a settlement fee of up to $6,250 (25% of $25,000). This is in addition to the $14,000 you pay to your creditors. Altogether you’d pay $20,250.
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Other costs to using JG Wentworth include a one-time $9.95 setup fee for the escrow account and a monthly $9.95 fee for maintaining the account.
JG Wentworth may also charge a fee of $17.99 per month for access to legal representation, in the case you’re sued by a creditor. This add-on service is offered at enrollment and 100% optional. Creditors may be more likely to sue if you owe a significant amount and are not responsive to their communications.
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JG Wentworth’s debt relief service, founded in 2019, is accredited by the Association for Consumer Debt Relief. One exception to settling with creditors is if you are insolvent, meaning your liabilities exceed your total assets at the time of settlement. This exemption allows you to negotiate with creditors even if you are in a financially dire situation.
When comparing JG Wentworth and National Debt Relief, both companies offer debt settlement services with similar projected savings. While National Debt Relief projects a slightly lower savings rate of 20% of enrolled debt after fees compared to JG Wentworth’s 21%, both companies charge the same settlement fee of up to 25% of the total debt enrolled.
National Debt Relief may be a better option for those with smaller debt loads, as they accept debts as low as $7,500. Additionally, if you are interested in a debt consolidation loan, National Debt Relief partners with Reach Financial to provide these loans, which are considered a safer option than debt settlement as they do not require you to withhold payment from your creditors.
It’s important to note that National Debt Relief is not available in certain states including Connecticut, Oregon, Vermont, West Virginia, and Wisconsin.
If you are considering alternatives to hiring a debt settlement company, there are several options available. You can try negotiating with creditors yourself, work with a nonprofit credit counseling agency for a debt management plan, consider a debt consolidation loan to pay off multiple debts at once, or explore bankruptcy as a way to resolve your debts under federal court protection. Each option has its own benefits and considerations, so it’s important to carefully evaluate which solution aligns best with your financial situation and goals. following sentence in a different way:
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