Click to move disregards collision?

Alright so if i use the following code`

 // Click To Move script
 // Moves the object towards the mouse position on left mouse click
  
 var smooth:int; // Determines how quickly object moves towards position
  
 private var targetPosition:Vector3;
  
 function Update () {
     if(Input.GetKeyDown(KeyCode.Mouse0))
     {
         var playerPlane = new Plane(Vector3.up, transform.position);
         var ray = Camera.main.ScreenPointToRay (Input.mousePosition);
         var hitdist = 0.0;
  
         if (playerPlane.Raycast (ray, hitdist)) {
             var targetPoint = ray.GetPoint(hitdist);
             targetPosition = ray.GetPoint(hitdist);
             var targetRotation = Quaternion.LookRotation(targetPoint - transform.position);
             transform.rotation = targetRotation;
         }
     }
  
     transform.position = Vector3.Lerp (transform.position, targetPosition, Time.deltaTime * smooth);
 }

then my player that was behaving so nicely before just falls through the world. im almost dead positive that it has something to do with this line

transform.position = Vector3.Lerp (transform.position, targetPosition, Time.deltaTime * smooth);

again, before i implemented this code the player was not falling through the world, and now it is.