Help! My tour operator is bankrupt

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A few months before her Italian vacation, Melanie Van Amsterdam's tour operator, Italiatour USA, folds. Now she has no airline tickets, hotel reservations or tour and is holding a bill for $7,178.62. The trip is a bust, but is there anything she can do to get her money back, short of going to court?

Q: I recently purchased a trip to Italy through Italiatour USA. They charged my credit card $7,178.62 — and then went bankrupt without sending me tickets.

I have disputed the claim with my credit card company. I doubt that a personal suit against Italiatour USA would lead to anything other than a headache.

Is there anything else I can do?

— Melanie Van Amsterdam, Albuquerque, N.M.

A: You did the right thing by charging your vacation to your credit card and then promptly disputing the charge once Italiatour ceased operations.

Let’s just say that if you had paid by cash, then we would be having an entirely different discussion. Then your only recourse would be to join a long a list of plaintiffs in a bankruptcy court. And even though you paid a lot of money for your Italy trip, chances are you’d be at the bottom of that list. (Think of all the other agencies that a tour operator does business with, each with even bigger claims than yours.)

But I’m not sure you would even have had that option. According to published reports, Italiatour closed its U.S. office in July 2005. The company had been the private-label vacation-packaging unit of Alitalia Airlines, and it was sold by the airline to CIT Tours in May 2003. However, Alitalia is said to have kept a 20 percent stake in the business. In other words, you may have found yourself in a foreign court at the end of this process.

Bankruptcy is not uncommon among tour operators, and the key is to protect yourself — and your trip — from that eventuality. Always pay with a credit card. Always buy trip protection insurance, but never, ever from the tour operator. Why? Because self-insurance will not protect you from a bankruptcy. If the tour operator goes belly-up, so does your policy.

When your tickets failed to materialize and you heard about Italiatour USA’s demise, you shouldn’t have wasted your time calling your agent or the company. In this particular case, agents were as confused as the rest of us, because there was little or no reliable information available on the company’s situation. I feel sorry for the travel counselors who had tens, even hundreds of thousands of dollars in business with Italiatour USA and were scrambling to salvage their clients’ vacations.

By immediately disputing your credit card charge, you all but guaranteed that you would get your money back. And indeed, a few days after we first corresponded, your credit card company notified you that it had credited your account. You will not have to pay for a vacation that you won’t be able to take.

Too bad Italiatour USA won’t be able to replace your missed trip to Europe. Unfortunately, that is something even your credit card company can’t do.

Christopher Elliott is National Geographic Traveler's ombudsman and a nationally syndicated columnist who specializes in solving your travel problems. Got a trip that needs fixing? Send him a or visit his . Your question may be published in a future story. Want to sound off about a story? Try visiting .