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That the senior living industry is grappling with bankruptcies and loan delinquencies is nothing new, but a recent Wall Street Journal article has me again pondering the impacts of such moves, both on residents and operators.
The article highlights the struggles of residents of Harborside, a life plan community in Port Washington, New York, after it declared Chapter 11 bankruptcy last year before finally changing hands in February. According to the Wall Street Journal, residents have struggled to get their entrance fees in the aftermath, with some getting back less than one third of their initial deposits.
Reflecting on the article, it’s clear to me that bankruptcies can have an outsized impact on residents, especially those who did not anticipate such challenges when they moved in. According to Gibbins Advisors data cited by the Wall Street Journal, at least 16 CCRCs have filed for Chapter 11 bankruptcy in the last five and a half years, with families losing more than $190 million in savings in that time.
This year, Senior Housing News has tracked multiple bankruptcies in the senior care sector, including most recently, post-acute operator Genesis HealthCare’s Chapter 11 filing.
Unfortunately, I still see evidence that the conditions pushing companies and communities to declare bankruptcy in the last few years are lingering, even as some rays of sunshine have begun poking through the dark clouds of the last few years.
While NIC MAP data shows loan delinquencies are at least not getting worse in 2025, other data shows that senior housing and care companies, including senior living and skilled nursing providers, still accounted for the lion’s share of healthcare company bankruptcies earlier this year.
In this members-only SHN+ Update, I analyze the trends with bankruptcies in senior living and offer the following takeaways:
- Data showing the trends of loan delinquencies and bankruptcy filings in senior living
- Recent bankruptcies in senior living and what these cases share in common
- How these bankruptcies have a lasting impact on residents
Inside the bankruptcy trend in 2025
The senior housing and care sector is still grappling with a trend of bankruptcies in 2025. In fact, senior care bankruptcy filings hit a two-year high in the first quarter of 2025, according to Gibbins Advisors. The number of bankruptcy filings from senior care companies went from three in the fourth quarter of 2024 to seven bankruptcies in 1Q25. Senior care bankruptcies accounted for more than 40% of total healthcare filings in the first quarter.
According to the report, a host of factors including interest rate and market uncertainty, labor costs, Medicaid cuts, pressure from payers, a widening income gap between “haves” and “have-nots” and shifting care delivery are all feeding into the health care bankruptcy trend.
Between 2019 and the first quarter of 2025, senior care bankruptcies made up nearly a quarter (24.1%) of all healthcare bankruptcy filings, according to the report.
The senior living industry specifically has had its fair share of bankruptcy filings in 2025.
In April, a management platform operating about two dozen communities and belonging to Pacifica Companies declared Chapter 7 bankruptcy. Months before that in February, nonprofit Lutheran Life filed for Chapter 11 bankruptcy. At the time, Lutheran Life CEO Sloan Bentley said the organization ran into financial difficulties stemming from the Covid-19 pandemic, including escalating wages, worker shortages and scant Medicare and Medicaid reimbursements.
Meanwhile in the world of skilled nursing, Genesis HealthCare filed for Ch. 11 bankruptcy just last week. The operator has more than 200 facilities nationwide, and about 15 are assisted living communities.
About a year ago, I spoke to Christian Horizons CEO Kate Bertram, who walked me through the company’s 2024 Chapter 11 bankruptcy process. The St. Louis-based organization lost many residents and short-term rehab customers in the early days of the Covid-19 pandemic and struggled to find its footing in the years that followed.
Specifically, the organization lost between one quarter and one third of incoming residents due to shelter-in-place policies early on in the pandemic. Additionally, wages for staff increased around 50%, leading to a particularly difficult strain on the organization’s cash reserves. Staff were being shifted among Christian Horizon’s rural communities to meet staffing requirements, and better performing communities were used to underwrite those that were struggling, though Bertram told me the practice simply wasn’t sustainable.
That is a trend I have seen in other senior living bankruptcies. For example, in February, CCRC operator Lutheran Life filed for bankruptcy, noting financial difficulties accumulated during the pandemic, such as cost of wages, shortage of workers and stagnant Medicaid and Medicare reimbursement rates all leading to its financial shortfall.
Recent anecdotes from operators and data shows the senior living industry still has not totally solved those problems. According to NIC, CCRC employment is down 5% since 2020, though assisted living staffing has seen an 11% increase. The report notes, however, that in order to keep up with the demand for incoming seniors, the industry needs to add over 660,000 workers by 2033. In that same timeframe, the number of senior living residents is projected to increase from 2.9 million today to 4.3 million.
Senior living residents, especially those living in CCRCs, typically trade in their home equity to fund their move into senior housing. But a lack of home sales or weak housing prices can make or break a community’s ability to get new residents, and such was the case with Harborside. New data from Redfin suggests that the U.S. housing market is shifting toward a buyer’s market, and that buyers are in some cases negotiating prices lower than what sellers have listed.
A January report from Fitch Ratings noted life plan communities in 2025 face potentially better conditions this year than in previous years as cost inflation eases and operators gain more control over staffing woes.
At the same time, NIC MAP data shows loan delinquencies are falling in 2025. By the end of 2024, borrowers were behind on payments representing 2.6% of total senior living loans, marking five quarters of continuous improvements since reaching a peak in 2023. And demand for senior living is surging as occupancy continues to tick up, which is no doubt good for operators’ bottom lines and ability to keep paying their debt service.
Still, putting all the pieces together, I believe that while conditions are improving, operators – especially those of life plan communities – are not out of the woods yet, and I would not be surprised if more bankruptcies cropped up in the remainder of this year.
Bankruptcies carry operational, human impact
Although senior living community bankruptcy sales may save operators from having to close their communities and help preserve the value of a property, such situations are rarely good for operations or the residents who live there.
Health care bankruptcies can “increase healthcare staff turnover, worsen care, and harm patients,” according to a May report from the National Bureau of Economic Research.
Turnover in a health care property in bankruptcy was 47% higher than non-bankrupt properties, the study’s authors wrote.
Often the issue at hand is that creditors are the first ones paid in a bankruptcy, before resident entrance fees or staff wages. As the Wall Street Journal wrote, payments to creditors in a bankruptcy can leave a community’s coffers dry and give residents few options for getting their money back.
As the WSJ article noted, Ch. 11 filings during the Covid pandemic wiped out more than 1,000 families’ savings totaling at least $190 million. One resident at Harborside paid more than $800,000 for an entrance fee with a 50% return, but only received $50,000 from the bankruptcy estate in the end.
While I think the buyers of such properties do want to turn them around and improve finances in the long-term, there is often not much they can do amid bankruptcy proceedings. Curt Schaller, principal of Chicago-based investor Focus Healthcare Partners – the company that acquired Harborside – told WSJ he is “sympathetic to the situation,” but that he can’t change how sale proceeds are doled out to residents or bondholders in that event.
Putting myself in a senior living resident’s shoes, this trend would alarm me. Operators of life plan communities say their residents like to plan ahead for life’s unexpected curveballs. But it seems too easy for a resident of one of these communities to fall into a similar situation, despite their best efforts of planning ahead.
And while on paper demand for senior living is strong, that has much to do with a historic lack of new openings. As long as cautionary tales like Harborside exist, I think that will only make residents more skittish about the prospect of moving into a senior living community, given that they can still end up losing much of their savings in the worst-case scenario despite their best efforts not to.
I’m unsure there is much that operators of these communities can do in the meantime to prevent these reputation hits. But obviously I think operators should heed these lessons in both their marketing and wider operations, and prepare to answer more questions from prospective residents and offer them a transparent look into a community’s finances to assuage their doubts and fears, if senior living bankruptcies continue to generate headlines.
