What Happens to Your Pay If Your Surrogacy Agency Goes Out of Business

Most surrogacy agencies never miss a payment. But two have collapsed in the last eighteen months and left pregnant surrogates unpaid, and if you are about to sign a contract you deserve a straight answer about what happens in that situation — not reassurance.

The short version: the agency is not the one who owes you money. The intended parents do. That distinction is the single most important thing on this page, and it is why a well-structured journey survives an agency failing.

What Actually Happened

In June 2024, Surrogacy Escrow Account Management — a Houston company that held funds for agencies across the country — collapsed. Its owner is accused of misappropriating more than $16 million in client money. In July 2025 a Harris County judge awarded over $1 million to affected families, though recovery remains uncertain while assets are frozen and a federal investigation continues.

In December 2025, Surro Connections, a Washington agency operating since 2010, stopped communicating with clients and then told them by email that it had no liquid capital. Between $2 million and $5 million in escrow funds is estimated missing, affecting roughly 150 families. Federal prosecutors have since brought charges. All defendants are presumed innocent unless and until proven guilty.

In both cases the pattern for surrogates was the same: monthly payments simply stopped, in some cases while they were twelve weeks pregnant, and nobody at the agency answered the phone.

Bankruptcy and Theft Are Not the Same Thing

Those two cases involve alleged criminal conduct. A plain insolvency — an agency that runs out of money without anyone stealing anything — is less dramatic and more common, and the practical effect on you is similar.

When a company files for bankruptcy protection, an automatic stay freezes its obligations while a court sorts out who gets paid from what remains. Unsecured creditors are last in line and usually recover cents on the dollar. If your compensation were an agency debt, you would be standing in that queue while pregnant.

It should never be an agency debt. Your gestational carrier agreement is between you and the intended parents. The agency coordinates, matches and administers — it is not a party to your compensation obligation. If it disappears tomorrow, the intended parents still owe you every dollar in your contract, and your agreement remains enforceable against them.

Where Escrow Fits — and Where It Does Not

Before any medical procedure begins, the intended parents are supposed to fund an escrow account covering your compensation and expenses for the journey. A third-party escrow manager holds it, and disbursements follow the schedule in your contract. Done properly, this means the money for your entire pregnancy already exists and is already out of the intended parents' hands before you take a single injection.

The failures above share one feature worth understanding. In the Surro Connections case, clients were reportedly persuaded to keep escrow funds with the agency rather than with an independent manager, on the assurance that the money was safe at an insured bank. That is the arrangement that turns an agency failure into your problem. When the agency holds the money and the agency fails, the money is inside the estate.

The Society for Ethics in Egg Donation and Surrogacy advises against in-house escrow for exactly this reason. There is no federal law regulating surrogacy escrow, so this is not a protection you can assume — it is one you have to verify.

Five Questions to Ask Before You Sign

Ask these of any agency, including ours. An agency that gets defensive about them has told you something.

1. Who holds the escrow — you, or an independent third party? You want a name, and you want it to be a licensed, bonded escrow company that is not the agency, not owned by the agency, and not run by anyone related to it.
2. Is the full amount funded before the medical cycle starts, or paid in as we go? Fully funded up front is the answer that protects you. Drip-funding means a future shortfall becomes your problem at the worst moment.
3. Can I see proof of funding before my transfer? You, or your attorney, should be able to confirm the account is funded. "Trust us" is not proof.
4. Who is my contract with? It should name the intended parents as the party who owes your compensation. If it reads as though the agency pays you, ask why.
5. What happens to my payments if the agency closes mid-journey? A good answer explains that escrow and your attorney keep operating independently of the agency. A vague answer is itself the answer.

Your Own Attorney Matters More Than You Think

Every surrogate should have independent legal counsel, paid for by the intended parents, reviewing the agreement before signing. That is standard practice and, in California, effectively required — your agreement must be executed with your own attorney before any medication begins.

That lawyer is yours, not the agency's. If the agency folds, your attorney still represents you, your contract still exists, and the escrow instructions still bind the escrow holder. The relationships that protect you are deliberately spread across parties who do not depend on each other.

If Payments Stop Mid-Pregnancy

If it ever happens to you, in this order:

1. Contact your attorney first — before the agency, before the intended parents. You need advice about your specific contract before you say anything that affects your position.
2. Contact the escrow holder directly. You are a beneficiary of that account. Ask for the current balance and the disbursement history in writing.
3. Keep every record. Payment dates, amounts, emails, texts, voicemails. Timelines decide these cases.
4. Talk to the intended parents. In both collapses above, many intended parents paid their surrogates directly out of pocket — some from retirement savings — because they had not stopped caring, they had stopped being able to reach the money.
5. Do not stop prenatal care. Your health and the baby's are not the thing to economise on while this is resolved. Tell your attorney immediately if coverage is at risk.

How We Handle It

We use a third-party escrow manager. We do not hold your compensation in house, and we would not ask you to agree to that. Your agreement is with the intended parents and names them as the party who owes you. Your attorney is independent, licensed in your state, and paid for by the intended parents. Funding is confirmed before medication begins.

None of that is unique to us — it is what a properly run journey looks like anywhere. The reason to ask about it is that the agencies that failed were also well-reviewed, long-established, and recommended by people who trusted them. Surro Connections operated for fifteen years.

So ask us the five questions. Ask the other agencies you are considering. Compare the answers.

General education, not legal or financial advice, and not a substitute for your own attorney. References to specific cases reflect publicly reported information; criminal charges are allegations and all individuals are presumed innocent unless and until proven guilty. On Fertility Ground is not involved in or affiliated with any case described here.