While nursing homes do look at financial statements, a senior living in, or applying to, a facility that takes Medicaid won't be rejected based on a bankruptcy because federal law prohibits such discrimination. But private facilities are a different matter, says Rose Scollard, an attorney and Equal Justice Works AmeriCorps Legal Fellow at Pro Seniors in Cincinnati.

"A (private assisted living) facility could refuse to accept an individual because of a bankruptcy," says Scollard. "However, if the senior needs to file bankruptcy, they probably have a lot of debt. Therefore, if the facility refused the applicant because of bankruptcy, they would also do so because of the amount of debt (the senior has) or (the senior's) lack of resources."

But even if a bankruptcy is a problem for a private assisted living facility, attorney Charles R. Gallagher III of St. Petersburg, Fla., says many facilities ask the senior's family member for a financial guarantee that the dues will be paid. In that scenario, the arrangement is essentially like co-signing a loan for the senior.