This page contains information about cards that are not currently available at NerdWallet. The information is collected by NerdWallet and has not been provided or reviewed by the card issuer.
JG Wentworth is a financial services company that negotiates on behalf of consumers to reduce the amount of debt they owe their creditors.
In this review, I’m going to cover how the JG Wentworth debt settlement process works, the pros and cons to consider and how to qualify.
But first I want to be clear: Debt settlement is risky. There is no guarantee of success, and it can seriously damage your credit.
Debt settlement can be an option for people who are deeply overwhelmed by debt. Before joining a program, NerdWallet recommends exploring other ways to get out of debt, such as enrolling in a debt management plan or applying for a debt consolidation loan.
JG Wentworth Debt Settlement at a Glance
Minimum Loan Required for Enrollment: | $10,000 |
Eligible Loan Types for Enrollment: | Unsecured debt, including credit cards, personal loans, collection accounts and some student loans. |
Settlement Fee: | 18% to 25% of total loan enrolled. |
Account Fees: | $9.95 one-time setup fee. |
How long it might take: | 32 months on average. |
How much you can save: | 21% of registered loan after fees. |
Availability: | Not available in West Virginia. |
How does JG Wentworth’s debt settlement program work?
When you enroll in debt settlement with JG Wentworth, you will need to stop paying 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 amount (called a settlement offer) because they’re worried you might not pay at all.
Instead of paying off your loans, you’ll make monthly payments 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 outright.
As soon as the account is credited, JG Wentworth begins the negotiation process. Once the creditor agrees to a settlement offer, you will pay the creditor from the escrow account. Then the loan is considered settled.
It takes an average of 32 months for customers to complete JG Wentworth’s debt settlement program.
🤓 Nerd tip
Debt settlement companies often list expected savings on their websites. These percentages vary significantly and may not include fees, so take them with a grain of salt. JG Wentworth told NerdWallet that consumers can expect to save 21% of their enrolled loan after fees. That means if your recorded debt is $25,000, you can save $5,250. Estimated savings are never guaranteed.
How Much Does JG Wentworth Debt Settlement Cost?
The biggest cost of debt settlement is the settlement fee. JG Wentworth’s loan settlement fee is 18% to 25% of the total registered loan and can be based on a number of factors, including your state of residence.
Here’s how the settlement fee works: Let’s say you sign up with $25,000 in credit card debt, and you’re able to settle that debt for $14,000. You may pay a settlement fee of up to $6,250 (25% of $25,000). This is in addition to the $14,000 you pay your creditors. In total you will pay $20,250.
Other costs for using JG Wentworth include a one-time $9.95 setup fee for the escrow account and a $9.95 monthly fee to maintain the account.
JG Wentworth may also charge a fee of $17.99 per month for access to legal representation, in the event that you are sued by a creditor. This add-on service is offered upon enrollment and is 100% optional. Creditors may be more likely to sue if you owe a significant amount and they are not responsive to their communications.
It is important to carefully weigh the pros and cons before deciding to work with JG Wentworth.
Cons
A dangerous way to get out of debt
JG Wentworth Benefits of Debt Relief
Free consultation: JG Wentworth offers a free initial phone call to learn more about debt settlement before you sign up. It will guide you through the process, as well as suggest a plan to resolve your debts. This is a no-obligation call, meaning you don’t have to opt-in to the service later if you’re not sure.
Multiple Approvals: JG Wentworth has numerous accolades. In addition to its accreditation by the BBB and ACDR, its debt experts are also accredited by the International Association of Professional Debt Arbitrators (IAPDA). IAPDA is a non-profit organization that helps both consumers and debt settlement companies evaluate debt relief options.
State Wide Availability: JG Wentworth’s debt settlement program is available in every state except West Virginia. This is significantly more coverage than many debt settlement companies, which can only offer their debt relief services in 40 states or fewer.
Disadvantages of JG Wentworth’s Debt Relief
Less Expected Savings: JG Wentworth’s expected savings — 21% of your enrolled loan after fees — is lower than other settlement companies reviewed by NerdWallet, many of which project savings of 25% or more. The amount you save will likely be affected by how many loans you enroll in the program and how quickly you can reach successful settlement.
A dangerous way to get out of debt: There are risks in working with JG Wentworth, including major damage to your credit, falling deeper into debt while you await successful settlement negotiations and even the possibility of being sued by a creditor. Learn more about reducing debt settlement risks.
No Guarantee of Success: Like all debt settlement companies, JG Wentworth may not be able to settle all of your debts even if you follow the program completely. This is because not all creditors accept settlement offers.
Increase in costs: When working with a debt settlement company like JG Wentworth, you may be charged a number of fees, including a monthly account maintenance fee and a settlement fee of up to 25% of the registered debt. These fees are in addition to charges you may collect from your lenders, such as late fees or interest. Consider alternative ways to get out of debt (listed below) that may have lower fees and lower overall costs.
How to qualify for debt settlement with JG Wentworth
JG Wentworth works with consumers who have at least $10,000 in unsecured debt. This can include credit cards, personal loans, collection accounts and some student loans.
It does not settle secured loans, meaning any loan that is attached to collateral, such as an auto loan or mortgage. It also does not settle debts in lawsuits, tax debts, child support debt or federal student loans.
JG Wentworth says new clients sign up with an average debt of $27,000, spread across seven accounts.
It conducts a soft credit pull, which won’t hurt your credit score. There is no strict credit check.
Know the risks of debt settlement.
It is important to understand the overall risks of debt settlement before deciding to work with JG Wentworth.
Organizations such as the Consumer Financial Protection Bureau and the Federal Trade Commission urge consumers interested in debt settlement to consider these risks:
- It will hurt your credit: Because you are required to stop making payments on unregistered debts, these accounts will be marked as delinquent on your credit reports. Your credit score will take a significant hit, especially if you weren’t already delinquent on these accounts. Delinquencies and delinquent accounts stay on your credit reports for up to seven years. .
- Interest and fees continue to accrue: Until you enter into a settlement agreement, you will accrue additional interest and late fees on your loan. . If you don’t stay through the program, or if the debt settlement company can’t negotiate a settlement, you may end up with a higher overall balance.
- You may still hear from creditors or debt collectors: There is no guarantee that your creditors will want to work with a debt settlement company, and you may be contacted by debt collectors or sued by creditors during the process. .
- A forgiven loan can be treated as taxable income: Forgiven debts over $600 can be counted as income on your taxes. . Creditors can mail you a 1099-C form to the IRS. One exception is if you are insolvent (your liabilities exceed your total assets) when the company settles with your creditors.
JG Wentworth v National Debt Relief
JG Wentworth and National Debt Relief both offer debt settlement services with similar expected savings. National’s projection is slightly lower at 20% of written debt after fees, compared to JG Wentworth’s 21%.
Both companies charge the same settlement fee of 25% of the total loan enrolled.
National may be a better fit if you have a light debt load — it accepts small loans of up to $7,500 — or if you’re interested in a debt consolidation loan. National Debt Relief partners with Reach Financial to provide these loans, which are generally a safer option than debt settlement, because they don’t require you to stop paying your creditors.
National Debt Relief is not available in Connecticut, Oregon, Vermont, West Virginia and Wisconsin.
Alternatives to Hiring a Debt Settlement Company
Settle the debt yourself.
While it may seem easier to have a third party, such as a debt settlement company, intervene on your behalf, you may have just as much success calling your creditors and negotiating with them yourself—and you could save thousands by not paying settlement fees.
As with using a debt settlement company, success is not guaranteed, but if you only have a few creditors, it’s worth a try.
With a debt management plan, you’ll work with a nonprofit credit counseling agency to consolidate your debts into one monthly payment, while also lowering interest rates.
This credit card is a good option for debt-ridden customers who have stable income to repay the loan within three to five years.
Unlike debt settlement, a debt management plan should help build your credit score.
With a debt consolidation loan, you can pay off multiple loans at once, so you only have one payment left on your new loan.
A debt consolidation loan should have a lower interest rate than your current debts, saving you money and helping you get out of debt faster.
Bankruptcy allows you to settle your debt under the protection of a federal court.
Chapter 7 bankruptcy, the most common form, wipes out most unsecured debts in four to six months. It will also stop calls from collectors and prevent lawsuits against you.
As with debt settlement, your credit will suffer, so consult with a bankruptcy attorney first.
Essay sources
NerdWallet authors are subjective authorities who use primary, reliable sources to report their work, including peer-reviewed studies, official websites, scholarly research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet’s high standards for journalism by reading our editorial guidelines.
