"It's embarrassing, he's embarrassing," says a Lohan insider, suggesting Michael pay attention to his own responsibilities, not those of Jon Gosselin. "He's trying to get deals for Jon. Maybe Jon can tell Michael to pay [ex-wife] Dina child support. He's now six months behind."
'Total Lie'A second Lohan source tells PEOPLE that Michael owes Dina money: "Michael is six months behind in child support. Over $12,000 is due, and it's in the hands of collections now." (While Lindsay, 23, and her brother Michael, 21, are legally adults, Ali, 15, and Dakota, 13, are minors.)
Michael Lohan, however, denies the debt. "That's a total lie. I pay Dina and the kids cash all the time," he tells PEOPLE.
The Lohan insider also maintains that Michael's intentions are self-serving: "He's trying to manage Jon Gosselin, and make money from him. It's gross. It's all about money."
As for Michael's turbulent relationship with his famous daughter, the source confirms they remain estranged, and that the Gosselin publicity isn't helping since Lindsay would prefer a more low-key father: "Lindsay's still not speaking to him." A rep for Lindsay had no comment.
And in regards to Michael offering marital advice to the Gosselins, another source, says, laughing, "Michael's giving advice about marriage, and about parenting? It's absurd."
Additional reporting by DIANE HERBST