More Nursing Home Bankruptcies Could Be Coming
Businesses of all types file for bankruptcy, and there are many different reasons that businesses ultimately file for bankruptcy. In some cases, businesses are able to reorganize debts through a Chapter 11 bankruptcy case so that they can remain open and continue to operate in the future. In other cases, businesses are in substantial amounts of debt and are unlikely to earn sufficient profits to overcome those debts, which usually means that the business closes and files for Chapter 7 bankruptcy. According to a recent article in McKnights Long-Term Care News, experts predict that more nursing homes are going to be filing for bankruptcy. While many people do not immediately think of medical facilities, including nursing homes, as businesses, these facilities are in fact businesses that deal with many of the same types of financial strains as companies in other industries.
What do you need to know about the possibility of nursing home bankruptcies? Our West Palm Beach bankruptcy lawyers can discuss the recent article and its potential implications in South Florida.
Nursing Home Bankruptcies Have Been Increasing
In the world of business bankruptcies, nursing homes have seen a rising rate in bankruptcy cases for a number of years. According to the article, many of these facilities that have filed for bankruptcy have faced financial difficulties that have led to closures and Chapter 7 bankruptcy filings. In the present, there are many nursing homes that are still open but are dealing with debts, and “mounting pressures caused by excess staffing agency use and other financial challenges.” Most immediately, lenders that had been willing to work with nursing homes and to negotiate debt and other financial issues in the earlier part of the COVID-19 pandemic are no longer willing to do so.
Indeed, the article suggests that lenders recognized the difficulties that nursing homes and other businesses were facing as a result of the pandemic. Nursing homes were often in particularly difficult positions given the vulnerable communities they serve. Now, however, lenders want to receive the money they owe or require businesses to close.
Pre-Pandemic Levels of Nursing Home Bankruptcies
In 2023, commentators estimate that nursing home bankruptcies will continue to rise, reaching pre-pandemic rates and beyond. According to the article, “healthcare bankruptcies jumped 84 percent in 2022, returning to pre-COVID levels,” and more than 26 percent of those healthcare bankruptcies were filed by businesses providing long-term care for older adults.
When nursing homes struggle with debt, they may have fewer options than other businesses. In addition to dealing with immense debts and negotiations with creditors, they also need “to protect the health and welfare of residents.” Accordingly, it is often difficult to find buyers for distressed nursing homes, and many turn to bankruptcy. If difficulties with staffing continue, more nursing homes, including those in Florida, will likely file for bankruptcy.
Contact a Bankruptcy Attorney in West Palm Beach
Nursing homes are businesses, and like other businesses, they can experience financial difficulties. If you have any questions about nursing home bankruptcies, or if you want to learn more about bankruptcy options for your business, it is important to seek advice from a lawyer who has experience handling business bankruptcies in South Florida. One of the experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton, Kaplan & Eller can talk with you today to learn more about your circumstances and to provide you with more information about your options.