You’ll have more consumer protection if you pay with a credit card. The Fair Credit Billing Act allows you to dispute a charge posted to your credit card account if the goods or services you purchased weren’t delivered. If your airline or tour operator goes bankrupt, you can write to your credit card company to request reimbursement for your tickets or trip, since you did not receive them.
You have 60 days from your statement mailing date to dispute a charge. You must dispute the charge in writing and enclose copies of your tickets, payment receipts and other supporting documents. Be sure to send your letter and supporting materials to the correct address; you can find it on your credit card statement.
Of course, if a codesharing airline provides transportation or a refund when your airline goes bankrupt, you will not be able to dispute the charge to your credit card account.
If you paid for tickets with cash and your travel provider goes bankrupt, your only recourse is to file a claim with the Bankruptcy Court. Once the case comes before the Court, your claim will be just one of many, so you may or may not recover your money.
Disclaimer: I am not an attorney, and this information is not intended to replace professional legal advice. Please consult an attorney or your credit card company if you have specific questions about a travel transaction.
