Did your airline, tour operator, or hotel chain file for bankruptcy? Unlike Europe, the US does not have a mandatory federal guarantee fund. However, US consumers have powerful legal tools to recover their money. This tool helps you bypass the bankrupt company and generates the right document: a FCBA Dispute Letter for your credit card issuer, a Travel Insurance Claim, or a Bankruptcy Proof of Claim for the court.
Editorially reviewed on: 10/27/2026
Unlike Europe, the United States does not have a federal insolvency protection scheme (like a mandatory guarantee fund) for package holidays. If a US travel supplier (airline, tour operator, hotel chain) files for Chapter 11 or Chapter 7 bankruptcy, consumers are generally considered "unsecured creditors". However, US consumers have powerful tools to recover their money, primarily through federal credit card laws and private travel insurance.
| Your payment method | First point of contact | Legal basis / Deadline |
|---|---|---|
| Credit Card | Credit Card Issuer (FCBA Dispute) | Fair Credit Billing Act (60 days from statement) |
| Travel Insurance | Insurance Provider (Financial Default) | Policy terms (often requires early purchase) |
| Debit Card / Bank Transfer | Bankruptcy Court / USTOA | Proof of Claim (Form 410) / USTOA $1M Plan |
The Fair Credit Billing Act (FCBA) is a federal law (15 U.S.C. § 1666) that protects consumers from being charged for "services not rendered". If a travel company goes bankrupt, the service is legally not rendered. You must send a written dispute letter to your card issuer's "Billing Inquiries" address within 60 days of the first statement containing the charge. During the investigation, the bank cannot report the amount as delinquent or charge interest on it. This is by far the fastest and most successful recovery method in the US.
Many comprehensive travel insurance policies include "Financial Default" coverage. This pays out if a supplier goes out of business. However, there is a catch: most policies only cover financial default if you purchased the insurance within 14 to 21 days of making your initial trip deposit. If you bought the insurance later, or if the supplier was already in financial distress when you booked, the claim may be denied.
If you booked with a member of the United States Tour Operators Association (USTOA), you are protected by their $1 Million Consumer Protection Plan. This fund is specifically designed to reimburse customers if a member company declares bankruptcy. You can file a claim directly through the USTOA, bypassing the bankruptcy court.
If you paid by debit card, bank transfer, or cash, and lack travel insurance, your only option is to file a Proof of Claim with the bankruptcy court handling the company's case. You will be classified as an "unsecured creditor". Unfortunately, unsecured creditors are at the bottom of the priority list. Recovery rates are typically very low (often pennies on the dollar), and the process can take years.
If the bankruptcy happens mid-trip, contact your travel insurance provider's 24/7 assistance line immediately. If you paid by credit card, contact your issuer to dispute upcoming charges or request an emergency cash advance if your policy allows it. Keep every single receipt for out-of-pocket expenses (new hotels, last-minute flights) as you will need them for your FCBA dispute or insurance claim.
Unlike Europe, the US has no federal guarantee fund for package holidays. If you paid by credit card, you are protected by the Fair Credit Billing Act (FCBA) and can dispute the charge as 'Services Not Rendered'. If you have travel insurance with 'Financial Default' coverage, you can file a claim. Otherwise, you become an unsecured creditor in bankruptcy court.
The Fair Credit Billing Act (15 U.S.C. § 1666) allows you to dispute credit card charges for services not provided. If a travel supplier goes bankrupt, you can withhold payment. You must notify your card issuer in writing within 60 days of the first statement containing the charge.
Many comprehensive travel insurance policies include 'Financial Default' coverage. However, it often requires that you purchased the policy within 14-21 days of making your initial trip deposit. Check your policy's specific terms regarding the supplier's bankruptcy.
If you paid by debit card, bank transfer, or lack insurance, you must file a 'Proof of Claim' (Form 410) with the bankruptcy court handling the company's case. You will be listed as an unsecured creditor. Recovery rates are typically very low and the process takes months or years.
Members of the United States Tour Operators Association (USTOA) are required to post $1 million in security to cover customer refunds in the event of bankruptcy. If your tour operator is a USTOA member, you can file a claim directly through their Consumer Protection Plan.
Contact your travel insurance provider's 24/7 assistance line immediately. If you paid by credit card, contact your issuer to dispute upcoming charges. Keep all receipts for out-of-pocket expenses (hotels, flights) as you will need them for your FCBA dispute or insurance claim.
For FCBA disputes, you must send the letter to the specific "Billing Inquiries" address of your card issuer, not the general payment address. It is highly recommended to send the letter via USPS Certified Mail with Return Receipt to prove delivery within the 60-day window. Never send original documents, only copies.
Our guides and generators are based on the analysis of US federal consumer protection laws, bankruptcy codes, and public administration information. They are developed by Marc (Project Management) & Team to enable travellers to carry out structured self-help for travel problems.
Important notice: This page does not provide individual legal advice. Procedures, deadlines, and responsibilities in the event of bankruptcy arise from the Fair Credit Billing Act, your insurance policy, and the federal bankruptcy court.
Problem with your flight, train, or hotel?
Fix-My-Trip checks your entitlement to compensation, ticket refund, or price reduction in just a few steps.
A service by Fix my Trip.
Found a bug in the tool? As an automated portal, we do not offer individual legal advice, but you help us enormously by reporting bugs or outdated information: Send feedback to our headquarters.
Whether it's a flight delay, hotel defect, or operator bankruptcy - here you will find the right guide and template letter for almost any travel situation.