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When a CCRC goes bankrupt: what happened to residents' entrance fees

Updated 2026-10-15

In a CCRC bankruptcy, bondholders and mortgage lenders are paid before residents' refunds. One family expected to recover about $18,000 of a $145,000 refundable fee.

Bankruptcies are uncommon but not rare. In February 2025 LeadingAge counted 17 life plan community bankruptcies since 2020, 0.8% of the 1,911 in the country (LeadingAge). Ziegler found that 93 of the 790 CCRC borrowers that issued unenhanced bonds between 1990 and 2024 defaulted at some point, 11.8% (Ziegler).

What residents have recovered

  • Henry Ford Village, Dearborn, Michigan (bankruptcy filed 2020). A resident paid a $145,000 entrance fee billed as a fully refundable deposit; his family learned they could recoup roughly $18,000 (Wall Street Journal, June 2024).
  • Edgemere, Dallas, Texas. When it was sold out of bankruptcy in July 2023, all residency agreements were rejected and it became a rental community. Its former parent, Lifespace Communities, agreed to repay roughly $140 million of entrance fees over 18 years, without interest, as long as Lifespace holds 250 days of cash (Wall Street Journal, June 2024).
  • Harborside, Port Washington, New York. Chapter 11 three times, in 2014, 2021 and late 2022. The Wall Street Journal’s July 2025 report followed a resident who had paid a $945,000 entrance fee there in January 2020 (Cozen O’Connor, summarising that report).

By that report’s count, at least 16 continuing care communities have filed for Chapter 11 since March 2020, affecting more than 1,000 families and erasing roughly $190 million in entrance fees (Cozen O’Connor).

Why residents come last

When a community files for Chapter 11, other debt, including bondholder and mortgage loans, is paid before anything goes to residents and their heirs (Wall Street Journal, June 2024). A buyer may honour existing contracts or, as at Edgemere, reject them.

The warning signs that appear in filings first

  • Days cash on hand falling toward the covenant minimum, year after year.
  • A missed covenant, a consultant called in, or a forbearance agreement with bondholders.
  • Independent-living occupancy sliding, which cuts the entrance fees that pay refunds.
  • Refunds owed to former residents growing faster than new entrance fees.
  • An auditor’s going-concern paragraph.

Each community page lists the events its filing reports, with dates and pages. Filings for 1 of the 117 communities here report a missed covenant or a bankruptcy: Givens Aldersgate.

Sources