Did you receive a mailer from JG Wentworth with a quote pre-qualified offer that would "save you hundreds" per month? Perhaps you saw a social media ad discussion structured settlements
Is the debt consolidation quote too good to be true?
According to their website, “JG Wentworth is a financial services company that focuses on helping consumers who are experiencing financial hardship or need access to cash.” One of the major products it offers is debt settlement.
If you are not familiar, Debt settlement is the process in which a third party negotiates with your creditor on your behalf. The goal of a debt settlement firm is to negotiate a lower balance from say $10,000 to $5,000 to provide you debt relief. I was the previous CEO of a debt settlement company, and I know that debt settlement may be a good option, but it also may be a terrible option depended on your financial situation.
If you watched any amount of cable television in the early to mid-2000s, its likely you have the JG Wentworth Opera engraved on your heart and could belt it out at the drop of a hat. If you haven't check out the jingle below with the ballads of getting immediate payments for structured settlements or annuities stuck with the audience decades after the ads first released.
JG Wentworth has been in business for over 30 years. This is a pretty great feat in a world where fast businesses are popping up everywhere. While the length of time a business has been open is not necessarily indicative of trustworthiness, it does speak to the longevity of their solutions. If the reviews that clients and customers have left over the past 30 years are still standing, it likely means that the solution JGW offered were effective and long lasting. Having a few decades to back up the services you offer is always a good thing. So what services does JG Wentworth offer? Let’s take a closer look!
This is found in a variety of services they offer. Aside from their debt relief service, JGW offers to buy out things like structured settlements, annuities, and casino or lottery winnings. These are instances where the full amount would be paid out over time instead of all at once.But are settlement and annuity payments the only thing that JG Wentworth offers?
Surprisingly, the answer is no! They offer a wide range of services, from debt relief, to lending.
Let's look at how much JG Wentworth may cost, specifically for debt settlement.
At Ascend, we believe that debt settlement may be a good option, but it’s only in the context of understanding all of your options and understanding the cost of that option. This is exactly why we built a free debt relief cost comparison calculator so that you are MOST informed. It will also allow you to compare the cost of debt settlement to debt management, debt payoff planning and bankruptcy.
Many times, debt relief companies charge 25% of your enrolled debt which is quite high. Furthermore, these company may say that the "fees are included in your monthly plan payment", but may not be upfront about the percentage.
How does that compare to other debt options such as debt payoff planning, other debt relief companies, debt management and bankruptcy? We built a free debt relief options calculator below to help you estimate the cost of that option vs other options. The calculator is 100% free, and does not even require an email address unless you'd like to save your results. It's also personalized to the city where you live and your financial situation.
To best understand how a company works, it can be helpful to look at both employee reviews and client reviews, so let's first look at what employees have stated via Glassdoor.
Luckily, there are more than enough reviews to be found on the internet covering JG Wentworth. Let’s take a look at a few:
At the time of this writing, JG Wentworth had a 4.1 based on 283 reviews on Consumer Affairs.
When I filtered for the 1 star reviews, some of the results were surprising to me. The top 2 reviews mentioned that their credit score was plummeting. Your credit score being negative affected is a common thing in a debt relief program. You may be curious why this may have not been explained to them.
Surprisingly, JG Wentworth’s BBB page only has 120 reviews. While this might be a lot for some companies, for a company that has been in business for over 30 years, this does seem a little low. However, it is likely that the company may be funneling their clients to a different review platform instead of JG Wentworth BBB. Despite this, JG Wentworth has an A+ Rating from BBB and is an Accredited Business. From the 120 reviews, JGW has an average rating of 4.18 out of 5-stars. Its good to see that many of the higher rated reviews discuss the actual process of debt settlement. Sometimes, people leave reviews after the first phone call they had with a sales representative.
The other major platform that houses thousands of reviews is TrustPilot. With close to 4,500 reviews, JG Wentworth has a 4.8 out of 5-star rating from its users. However, unlike the BBB, the reviews on TrustPilot definitely seem more surface level and might be reviewing JGW customer service more than their debt settlement services. As you can see in the review below, many reviews note how friendly and helpful the representatives are and come from people who may not have even enrolled in the program.
Despite this, there are still plenty of reviews on TrustPilot that are from users who went through the entire process with JGW and still left glowing reviews. I do think it is important to note that there are a some very critical reviews on both TrustPilot and the BBB site.
Many clients did complain about two issues:
While these are very common possible (and even likely) consequences of debt settlement, it can be easy to get frustrated when they actually happen. Unfortunately, this is not something that the debt settlement company can protect you from and is something that you will have to be okay with if you decide to pursue debt settlement. This does NOT mean that debt settlement companies should try to hide this consequence from you. In fact, they should be very upfront with the potential dangers of going through the process.
If you notice a company trying to hide potential dangers from you, consider finding someone else to work with.
It looks like JG Wentworth only offers one type of debt relief: debt settlement. In most of the content on their website, debt settlement is used interchangeably with the term ‘debt relief’. While this is not the most accurate term to use, know that when the website mentions ‘debt relief,’ what they are really meaning is debt settlement. The website also makes frequent mention of debt consolidation, though they do not seem to offer the service outright.
We will take a closer look at the differences between debt settlement and debt consolidation. However, JGW’s website does definitely point the reader in the direction of debt settlement being the better option. They even have a calculator that shows the difference in what you would pay in total with debt settlement, debt consolidation, or just paying it off month by month.
While the calculator might be slightly misleading (they play up the fact that debt settlement doesn’t include interest payments, but neglect to advertise in the same graphic that there are other fees incurred with settlement), it does give a good timeline and estimate of total payment that can help you make a decision as to which option is best for you.
Let’s take a closer look at the differences between debt settlement and debt consolidation.
Since JG Wentworth focuses on these two styles of debt relief the most, let’s compare the two in detail.
Debt settlement is a process in which you negotiate with your creditor (or the debt collection agency that owns your debt) a lower payment that would fully satisfy the account. Oftentimes, between 15-30% can be forgiven. But sometimes that amount can jump up to 50%! Theoretically, this is something you could do on your own. However, people typically choose to work with a company that will negotiate on their behalf.
When you do this, the process might look a little bit different. When working with a debt settlement company, you “enroll” your debt. This means that you give the company the authority to negotiate on your behalf with your creditor. Typically, the amount of debt that you enroll is what will be considered when determining your debt settlement fee. In a majority of cases this fee is between 18-25% of the total enrolled debt.
While you are waiting for your debt amount to be negotiated you will do two things. First, you will STOP paying your creditor or the debt collection agency. Second, you will begin making monthly payments into an escrow account. This account is usually set up by the company you are working with. The payments that you put into this account will later be used to pay off the debt that you owe.
The debt settlement process is complete when your total debt amount has been negotiated down, you have paid off the debt, and you have paid the debt settlement company its fee. The process can take anywhere from 6 months to 3 years. This typically depends on how much you can pay into your escrow account each month.
As mentioned above, there tends to be a range that companies typically charge to settle your debt. In most scenarios, companies tend to charge between 18-25% of the total amount of debt that you enroll.
From what we were able to find, it looks like JG Wentworth does fall on the higher end of the range. A 25% charge was the most frequently seen. Again, please take into consideration that this is only based off of what we were able to find in reviews since JGW does not disclose the amount they charge for debt settlement on their website.
Based on this, if you were to enroll $10,000 of debt, then you would be charged an extra $2,500 service fee. This would be on top of whatever you have to pay to your creditor. Keep this in mind if you are considering debt settlement.
In most cases, debt consolidation is relatively straightforward. Let’s say you have 8 different lines of credit/amounts of debt. If they all have varying interest rates and due dates, it could be difficult to keep up with the payments, especially if you aren’t able to afford each minimum amount due. One option you have is to get a debt consolidation loan. This loan would be used to immediately pay off all 8 lines of credit/debt amounts.
Once they have been paid off, you then have one single payment to make on the consolidation loan. This can help make each month’s debt cost more manageable. While this can be helpful, do keep in mind that you will have an interest payment added onto the loan. This will add to the total amount of your debt. There are definitely consequences to each type of debt relief. However, debt settlement’s impact tends to be slightly worse than the impact of debt consolidation. If maintaining your credit score is something you value, then consolidation might be the best option for you.
So is JG Wentworth more than just an epic commercial-opera? Or is their biggest strong suit creating inspirational lyrics? Based on the length of time the company has been in business, along with their presence on media and online, it does seem like, at the very least, JG Wentworth is a legitimate business that offers legitimate services. That said, the question is whether you should use them or another product for what you are trying to accomplish.
It appears as though JG Wentworth is equally capable of debt settlement as they are of creating rocking commercial operas that stick around for decades. While there might be some hesitancy from some users, the majority of reviews found online praise JG Wentworth for their attentiveness and effectiveness. Go through some other review sites and platforms to read more about what clients have said about JG Wentworth.
Before signing up with any debt relief program, consider taking our free debt resolution cost and options calculator below to compare all of your different relief options.
