You must have messed up your settings in file location preferences and pointed both the lyrics folder and the setlists folder to the same target folder.
This would cause lyric files and setlist files to be created in the same folder.
To fix this:
1) Firstly fix the file location preferences. Either A) manually select two separate folders for lyrics and setlists or
On the help page press the reset button, this will set ALL preferences back to the original defaults.
2) Open your file management app on your device and use it to manually move the lyric files to your lyrics folder and your setlist files to your setlist folder.
3) Restart Lyric pad.,