Categories: Money

Does J.G. Wentworth Really Work?

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You might have seen a J.G. Wentworth commercial or two over the years, as they have a pretty extensive advertising campaign geared at getting people to call in to get their cash now. They’ve taken some criticism as being just another company out to take advantage of unsuspecting suckers, but they seem to be doing alright or they wouldn’t be able to run national ads with such frequency. So can it really work out well for the client?

Overview
They say money makes people act funny, but the need for money when you’re in a tight spot will make people do all sorts of things. If you’ve got money coming to you, but just not right now, it can be really frustrating and it can seem silly to have to undergo financial duress when salvation is on its way. It seems like it would be much easier to just get the money now, fix the financial mess, and then be in the clear. But of course nothing is ever this easy, and everything comes with a cost, so let’s look into whether this is a good idea or not.

The Claim
J.G. Wentworth claims that “it’s your money, use it when you need it” and the gist of their business is getting people to sell them their annuity or settlement for a reduced amount. Some have likened it to being a lender and using the annuity or settlement payments as loan payments. The difference between what they give out and what the assets are worth would them be comparable to a fixed interest rate. But what it’s really about is buying assets at low prices, with the lure being that you get all of the money upfront and you don’t have to wait years and years.

The Hype
The hype comes from the excessive amount of advertising they do on television, which includes jingles and catchy telephone numbers to entice people to contact them. They really drive home the fact that it is your money, and that you should be able to use it when you need it. This gives people a feeling of entitlement, and almost seems to be trying to get them disgruntled at the fact that they aren’t getting all of what’s theirs all at once, and posits themselves as the savior that will come by and give people what is rightfully theirs.

The Cost
The cost of doing business with J.G. Wentworth will depend on what they offer you for your settlement, and what you agree to in order to make the transaction happen. They are likely not going to give you anything close to the full amount of what is owed to you, because they will be dealing a lot with what is referred to as the time value of money. This means that money you have access to right now is worth more than promised money in the future.

The Commitment
Once you accept the terms and conditions of their offer you’re pretty much done with the process, you receive your lump sum of cash, and you do with it what you will. They stress how easy the process is, and break it down into three simple steps. This is good to know because if you really do need the money now, you don’t want to have to wait weeks for things to be approved and finalized. It’s also in their best interest to move the process along, in case you change your mind or have someone talk you out of it.

Evaluation
Of course most people know that they are going to get a much smaller amount of money up front instead of waiting to receive it in installments. That’s how J.G. Wentworth makes their money. They’re willing to wait, and are in it for the long term. For them it’s better than investing in the stock market or using other investment vehicles, since their rate of return is fixed by whatever terms they offer you and you accept.

It’s always a good idea to talk with a financial adviser who might be able to show you some better options than selling off your asset. They may suggest things like taking out a loan using the asset as collateral, or they will be able to find out exactly what your cash needs are so you only need to sell a portion of the settlement and keep the rest intact. For example, one of their testimonials has a couple that only cashed in one annuity payment so they could have the wedding of their dreams. That’s probably a better idea than selling off the entire thing and trying to manage a bunch of cash all at once.

Final J.G. Wentworth Review

Although J.G. Wentworth takes some flak for being in a predatory lender kind of role they aren’t forcing anyone to take them up on their offer, and they seem to be able to convince enough people to be able to stay in business for so long. There may be better ways out of a financial jam than using their service, but it doesn’t hurt to see what kind of offer they make, and compare it to your other options.

Our Recommendation
Before giving them a call, we’d definitely sit down and get all of our ducks in a row, either with a financial adviser or a trusted friend that can help you get a different perspective on things. This is a big decision, and once you go through with it you won’t be able to undo it, and you’ll be out that asset forever.

What do you think? Does J.G. Wentworth work or not?

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View Comments

Skinny Zing says:

September 20, 2012 at 2:30 pm

I bet J.G. Wentworth is making a killing in this economy because I'm about to give them a call as well. If you’ve got no full time job then you can forget about loans and new credit cards, they're not giving it to you no matter how many junk mails they send you to spend some "free" money. At the end of the day people like me have only few choices and one of the lesser evils happens to be J.G. Wentworth.