JG Wentworth vs. National Debt Relief for debt relief

Two different companies, one shared product

Most people know JG Wentworth from its “877 CASH NOW” ads for buying structured settlement and annuity payments. That is still its core business. Searchers comparing it with National Debt Relief are almost always looking at a different product: its debt relief program, a debt settlement service run by JGW Debt Settlement, LLC (NMLS 1925575). That is the program this page compares.

National Debt Relief does one main thing: debt settlement for unsecured debts such as credit cards, medical bills and personal loans. It also refers some callers to consolidation loans through partner lenders.

Both programs work the same way. You enroll unsecured debts, stop paying those creditors and make one monthly deposit into a dedicated account in your name. Once enough money builds up, the company negotiates a lump-sum payoff with each creditor, you approve it and the company takes its fee for that debt. Secured debts like mortgages and car loans are not eligible with either one.

JG Wentworth says its own company offers the program in 30 states and DC, and residents of other states may be referred to a law firm. National Debt Relief says only that its program is not available in all states. Ask either company which entity will sign your contract before you enroll.

Fees and what you actually save

The fee ranges overlap. JG Wentworth charges 18% to 25% of each enrolled debt, depending on your state and how much you owe. National Debt Relief charges up to 25% of enrolled debt, also depending on state and amount. Both collect the fee only after a debt is settled, as the FTC’s Telemarketing Sales Rule requires. Both also use a dedicated account provider that charges its own monthly fee, listed in your contract.

The savings disclosures differ. National Debt Relief’s home page says clients who stay in and settle all their debt “realize approximate savings of 45% before fees, or 20% including our fees, over 24 to 48 months.” On $20,000 of enrolled debt, that average means paying about $16,000 in settlements and fees combined.

JG Wentworth advertises 46% average savings and states that the figure does not include its fee. It does not publish an after-fee number. If you subtract an 18% to 25% fee from 46%, the result is roughly 21% to 28%, or about $14,400 to $15,800 paid on $20,000, before account fees. That is our arithmetic, not a company figure.

Results vary, and not everyone finishes. Interest and late fees keep building on accounts until they settle. Get the fee percentage, the account fee and the estimated settlement for each debt in writing from both before you choose.

Credit damage, lawsuits and taxes

The risks are the same with both programs because they come from how debt settlement works. You stop paying the enrolled creditors while you save, so late payments, charge-offs and collection accounts show up on your credit reports. JG Wentworth’s own disclosure warns that stopping payments will likely hurt your credit, may lead to collections and lawsuits, and can increase what you owe. The CFPB gives the same warning for the whole industry.

Creditors can sue you during the program. Neither company represents you in court as part of the standard fee, so answer any court papers yourself and talk to a consumer attorney if you are sued.

Forgiven debt can count as taxable income. Creditors may send a Form 1099-C, and the IRS lets you exclude some or all of it if you were insolvent when the debt was canceled. Ask a tax professional before you settle large balances.

If you can still make your payments, a nonprofit debt management plan usually does less damage. It repays the full balance at a lower interest rate without missed payments. If your debts are unmanageable, a consultation with a bankruptcy attorney is worth having before any settlement program.

Track record

Both companies are rated A+ by the BBB. JG Wentworth was founded in 1991, has been BBB accredited since 1996 and rates 4.8 out of 5 from 29,594 reviews on Trustpilot. It completed a prepackaged Chapter 11 reorganization between December 2017 and January 2018, and customer programs kept running throughout. National Debt Relief has been BBB accredited since 2013 and rates 4.7 out of 5 from 45,344 reviews on Trustpilot.

Whichever you choose, get the fee percentage, the account fee and the name of the company that signs your contract in writing, and never respond to a debt relief offer that looks like it comes from a government agency.