Yes, it happens. And when it does, residents can lose hundreds of thousands of dollars. Arlene Kohen, 89 years old, paid $945,000 to move into Harborside, a continuing care retirement community in Port Washington, New York, in January 2020. She expected lifelong housing and care. Three years later, Harborside filed for bankruptcy—the second and third time in a decade. Like hundreds of other residents at Harborside and at least 15 other CCRCs nationwide that have collapsed since 2020, Kohen faced the prospect of losing most or all of her entrance fee.
At least 16 continuing care retirement communities have filed Chapter 11 bankruptcy since March 2020, impacting over 1,000 families and resulting in approximately $190 million in lost or partially lost entrance fees. These aren’t isolated incidents. They’re part of a growing pattern that exposes a fundamental flaw in how Americans protect retirement savings when they move into assisted living. When you pay an entrance fee to a continuing care retirement community—typically ranging from $150,000 to over $1 million—you are making what feels like a straightforward transaction: you pay upfront in exchange for housing, meals, and healthcare for life. But when a CCRC files for bankruptcy, residents discover a harsh reality: they are treated as unsecured creditors, placed dead last in the repayment queue, far behind bond holders, lenders, and staff claims. In the Harborside bankruptcy, residents were owed approximately $130 million in entrance fees, but the settlement through the bankruptcy process recovered only $42.5 million—roughly 30 cents on the dollar. The first refund payments, distributed in October 2025, ranged from $17,000 to $25,000 per resident, a devastating shortfall for people who expected their life savings to secure their future.
Table of Contents
- How Do Entrance Fees Vanish When a Continuing Care Retirement Community Fails?
- The Scale of CCRC Bankruptcy Losses and Why It’s Growing
- The Harborside Story: When a Decades-Old Facility Couldn’t Survive
- How to Assess a CCRC’s Financial Health Before You Move
- What Happens to Residents During CCRC Bankruptcy?
- Life After Your CCRC Closes: Relocation, Loss, and Recovery
- Regulatory Gaps and the Future of CCRC Oversight
- Conclusion
How Do Entrance Fees Vanish When a Continuing Care Retirement Community Fails?
A continuing care retirement community entrance fee is not a rental deposit. It is a large, often non-refundable payment that residents make in exchange for the promise of housing, meals, healthcare, and services for the remainder of their lives. The fee structure varies by community, but the average entrance fee ranges from $150,000 to $500,000, with luxury communities charging well over $1 million. In some cases, contracts promise partial refunds if residents leave or transfer units—but only if the community remains solvent and has the cash to pay out those refunds. When a CCRC becomes insolvent, the entrance fee becomes a liability on the community’s balance sheet, not a protected asset. Instead, it becomes an unsecured claim in the bankruptcy proceedings. This matters enormously.
In bankruptcy court, the hierarchy of repayment is strict: secured lenders (mortgage holders) get paid first, then operational creditors (like staff wages and vendors), then bond holders, and finally unsecured creditors—the residents. By the time unsecured residents’ claims are addressed, much of the property’s value has already been allocated to other claims. The facility’s real estate is typically sold at a discount to cover debts, leaving residents competing for scraps. The Harborside case illustrates this hierarchy. When the facility was sold in May 2025 for $86 million—a reasonable price for a major Long Island property with hundreds of units—that sale price was quickly consumed by secured debt and operational obligations. The bankruptcy settlement eventually set aside $42.5 million for entrance fee recovery, meaning residents recovered less than one-third of what they paid. Even worse, some residents had paid their entrance fees a decade earlier and were still awaiting refunds when the final bankruptcy filing occurred.
The Scale of CCRC Bankruptcy Losses and Why It’s Growing
The numbers are alarming. At least 15 continuing care retirement communities have filed for bankruptcy in the last six years, with significant filings occurring in 2020, 2021, 2022, and 2023. These bankruptcies are not limited to small or poorly managed facilities—many are established communities with decades of history and strong reputations. The residents impacted by these closures number in the thousands, with combined entrance fee losses approaching $200 million. For a typical resident losing a $400,000 entrance fee and recovering 30 percent through bankruptcy, that’s a $280,000 loss—often representing a lifetime of savings. Why is this happening? CCRCs are vulnerable to several financial pressures simultaneously. The model depends on a steady stream of new residents paying entrance fees to subsidize current residents’ below-market monthly fees.
When occupancy drops—whether due to market downturns, competition, pandemic-related restrictions, or poor management—the cash flow model collapses. Rising healthcare costs compound the problem. Many CCRCs locked residents into fixed or minimal monthly fee increases, leaving the community unable to keep pace with inflation in nursing care, staffing, and medical supplies. During the COVID-19 pandemic, many CCRCs faced simultaneous occupancy losses and increased healthcare costs, creating a perfect financial storm. Additionally, some CCRCs have been poorly managed, with executives and boards failing to adjust pricing or operations when warning signs appeared. The limitation of the current regulatory system is that residents often have no way to know a CCRC is in financial trouble until it’s too late. While CCRCs are required to file annual financial disclosures with state regulators in many states, these documents are often opaque and difficult for individual residents to interpret. A facility can appear operational while bleeding cash, and by the time residents learn of financial distress, their only options are to stay and hope for a bankruptcy settlement, or leave and try to find alternative housing with limited resources.
The Harborside Story: When a Decades-Old Facility Couldn’t Survive
Harborside in Port Washington was not a fly-by-night operation. It was an established continuing care community with hundreds of residents and a history spanning decades. Yet it filed for bankruptcy three times: in 2014, again in 2021, and finally in 2022-2023. The pattern reveals how even established facilities can spiral into insolvency. The first bankruptcy in 2014 suggested financial stress but the community recovered. The second, in 2021, came during the pandemic when occupancy dropped and healthcare costs surged. But the third bankruptcy was terminal. Residents like Arlene Kohen paid their entrance fees believing Harborside’s long operating history meant safety.
Kohen, at 89 years old, was well past the age where she could start over elsewhere. She had already sold her previous home and committed her life savings. Other residents, like Barbara and Norman Cooper, had lived at Harborside for nearly a decade—they had already paid $946,000 in entrance fees years earlier and were hoping to live out their remaining years there. When the final bankruptcy filing occurred, they faced displacement, loss of their home, and the uncertainty of whether they would recover any of their entrance fees before their deaths. The sale of Harborside’s property to Focus Healthcare Partners for $86 million in May 2025 provided some recovery, but the process took years. The facility was reopened as “The Sinclair” under new management by Chelsea Senior Living, but it was restructured as month-to-month rentals with no entrance fees and no long-term care contracts. For the displaced residents, this meant they could not move back in under the terms they had expected. They had to find alternative senior living facilities, often in different communities, disrupting their social networks and familiar routines—if they were even physically able to move.
How to Assess a CCRC’s Financial Health Before You Move
Before paying a large entrance fee, residents and their families have a responsibility to investigate the CCRC’s financial condition. Most states require CCRCs to file annual financial disclosure reports, often with the state attorney general or a dedicated regulatory agency. These reports should include balance sheets, income statements, and occupancy rates. Request these documents and compare them year-over-year. A declining occupancy rate, growing operating losses, or increasing debt levels are red flags. Compare the CCRC’s fee structure to competitors in your area. If one community charges significantly less for the same services, ask why. It may be newer or more efficient, or it may be pricing unsustainably to fill units.
Conversely, if a community’s entrance fees seem excessively high relative to its actual services, that’s also a warning sign of financial instability—the community may be relying on entrance fees to cover operational costs rather than sustainable monthly fees. A healthy CCRC should be able to operate without constant cash injections from new residents. Additionally, ask for the community’s refund policy in writing and understand the conditions. Some facilities offer entrance fee refunds if you leave within a certain period, but these refunds are often contingent on the community being solvent and finding a new resident. The tradeoff is that thorough financial due diligence requires time and often the help of a financial advisor or attorney. You may also want to speak with current residents and their families about their satisfaction and any concerns they have about the community’s operations. Some facilities welcome these conversations; others are evasive. Evasiveness is itself a red flag. If a community is unwilling to discuss its finances or connect you with current residents, that’s a strong signal to look elsewhere.
What Happens to Residents During CCRC Bankruptcy?
Once a continuing care retirement community files for bankruptcy, residents enter a legal and emotional limbo. The community continues to operate, and residents continue to pay their monthly fees—often $5,000 to $10,000 per month or more. But these monthly payments don’t guarantee that residents will receive services, and they don’t protect residents’ entrance fee investments. In fact, residents’ interests become subordinated to the interests of the bankruptcy court, the property’s creditors, and the court-appointed trustee managing the estate. During the bankruptcy process, which can last several years, the facility’s future is uncertain. Will it be sold? Will new management take over? Will it be liquidated? Residents don’t have control over these decisions, and they often don’t have clear information about the timeline.
For elderly residents with limited mobility and failing health, this uncertainty is profoundly stressful. Some residents have died during the bankruptcy process, never receiving their entrance fee refunds. Others have been forced to relocate mid-process because the community closed or could no longer provide their level of care. A critical warning: residents continue to accumulate monthly fee obligations during bankruptcy, and these obligations can accumulate into additional debts. If a resident’s entrance fee is partially or wholly lost, and then the resident also incurs significant unpaid monthly fees during bankruptcy proceedings, the resident ends up with both losses. Moreover, if a resident passes away during bankruptcy, their heirs may face claims against their estate for unpaid monthly fees, further eroding any inheritance.
Life After Your CCRC Closes: Relocation, Loss, and Recovery
When a CCRC closes or is sold to new management, residents must relocate—often on short notice and with limited resources. This is not a minor inconvenience. For an 85-year-old with arthritis, dementia, or other health conditions, moving to a new facility can trigger a health crisis. The stress of relocation alone can lead to hospitalization or death. Additionally, alternative senior living communities in the same area may be fully occupied, forcing residents to move far from their families and support networks. The Harborside example again is instructive.
When the facility closed and was reopened as “The Sinclair” under new management, it was restructured as a month-to-month rental operation. This means residents who wanted to stay would have to accept a completely different contract structure: no entrance fee, but also no long-term care guarantee and significantly higher monthly rents. For residents on fixed incomes who had already lost substantial entrance fees, this was financially impossible. Those who left faced the challenge of finding alternative housing on short notice, often at premium prices in a competitive market. Some residents receive relocation assistance from the bankruptcy trustee or the new facility operator, but this assistance is rarely generous and is often too little, too late. The emotional and financial toll of displacement extends far beyond the loss of the entrance fee itself. Residents lose their community, their routines, and their sense of security at a life stage when stability is essential.
Regulatory Gaps and the Future of CCRC Oversight
The CCRC bankruptcy crisis reveals significant gaps in state and federal regulation. While most states require CCRCs to be licensed and to file financial disclosures, the level of regulatory oversight varies dramatically. Some states have robust regulatory agencies that monitor CCRC solvency and impose reserve requirements to protect residents. Others have minimal oversight.
There is no national standard, meaning a resident in one state may have strong protections while a resident in another state has almost none. Moving forward, residents and policymakers are pushing for stronger protections, including mandatory entrance fee escrow accounts (money held in trust until the resident has lived at the community for a certain period), higher capital reserve requirements, and better disclosure of financial risks. Some advocates have proposed that entrance fees be treated as secured claims rather than unsecured claims in bankruptcy, giving residents priority over institutional creditors. These changes could significantly reduce losses in future CCRC failures, but they have not yet been widely adopted. Until comprehensive reforms are enacted, residents remain vulnerable to sudden, catastrophic losses—and CCRCs will continue to fail, leaving seniors stranded and financially devastated.
Conclusion
The story of Arlene Kohen and the hundreds of other residents who lost large entrance fees to CCRC bankruptcies is a stark reminder that financial promises made in a senior living contract are only as good as the institution making them. A $250,000 entrance fee—or $945,000, or any amount—can vanish if the community fails, leaving residents with partial or no recovery. The current system relies on residents and their families to conduct thorough financial due diligence, to understand bankruptcy law, and to advocate fiercely for their interests. But this burden is unfair to people who are already vulnerable by virtue of age, health, and cognitive capacity.
If you are considering a continuing care retirement community, request and carefully review financial documents, speak with current residents, consult with a financial advisor or attorney, and understand the conditions of your entrance fee refund. If you are already a resident in a community showing signs of financial stress, contact your state attorney general’s office and consider consulting with an elder law attorney about your options. The CCRC model can provide valuable long-term care and housing, but only when operated by financially stable organizations with transparent practices and genuine commitment to protecting residents’ interests. Your retirement security may depend on asking hard questions before you sign.