Logo/ client help

Hi! Someone sent me a JPEG with a logo they made. She wants me to change it into a few colors and to take off the background. It’s mostly text and an illustration/image. The Problem is it’s not such a clear image and when I image trace it, the whole text gets distorted and loses it’s shape.
It would probably be much easier for me to just recreate the logo…
Any advice?
Maybe I’m not doing the right steps

As long as there’s no issue of copywriting (is she giving you someone else’s design that she didn’t pay for?), I would say to just recreate it yourself. Tell her you can’t trace it so she knows that you’re sending a new file.

she wants to vectorize the logo?
if not then you can just do it in photoshop, but I would just recreate it in illustrator if its not too complicated.