Safe Hands, based in Durkar, has been put into administration and is thought to have more than 46,000 customers across the UK.
With the average cost of a funeral in the UK at about £3,800, it means customers - many whom have paid upfront for their funeral arrangements - could potentially have lost a collective total of more than £100 million.
A statement has been issued on the website of the company, which is on Mariner Court on Calder Park, which says joint administrators were appointed on March 23, and they are currently not in a position to honour any funerals for its policy holders as a result.
Rival provider Dignity has confirmed it will fulfil any funerals for Safe Hands customers who die before April 7.
The statement put on the Safe Hands website reads: "The appointment of the joint administrators was made by the directors of the company, after a period of severe financial challenge, which has left the business unsustainable in its current form.
"The company has ceased to trade insofar as it will not be accepting any new customers but will be assisting current plan holders with contingency funeral planning services with the assistance of a third-party provider.
"The joint administrators are exploring possible solutions including the possibility of the rescue of the business with alternative funeral providers."
Customer Tony Lynch, who is from north Wales, contacted the Express after he paid in more than £6,500 to cover funeral bills for himself and his wife.
He said: "I've been looking at Safe Hands on Companies House website, and I'm not a whizz in business, but in 2019 it said they had assets worth £3 million, then 12 months later it was down to £500,000.
"And they have changed directors left, right and centre, it all just seems a little bit fishy to me.
"I'm 75 and and my wife is 74, and when we got to our 70s we thought we should make a funeral plan.
"We've all got to go sometime so we made a few inquiries and Safe Hands seemed quite reasonable at the time.
"We just didn't want to burden our kids when we go, because you're looking at a funeral bill for £5,000.
"I've not been myself since (the company went bust), but what can I do, we'll just have to wait and see what happens."
The news of the company's collapse comes as a crackdown on the industry by the regulator, the Financial Conduct Authority (FCA), looms.
It pledged to regulate the sector after a probe exposed evidence of mis-selling and unfair charges.