Residents have been given 28 days to leave after Ashley Manor Nursing Home in Shedfield, Hampshire went into administration.
The home, which had racked up debts of more than £200,000 according to the Southern Daily Echo, provides accommodation and nursing care for up to 45 people.
Ashley Manor was rated Requires Improvement on its last inspection by the CQC in April (see report) with inspectors commending the service for making improvements since being rated Inadequate in its previous inspection in November 2016.
A spokesman for Hampshire County Council said: “Each family is being allocated a dedicated social worker and we have begun detailed discussions with each individual resident about their care needs and preferences in order to source suitable alternative accommodation for them.
“While we look for new homes, residents will continue to be cared for in Ashley Manor with the care overseen by our dedicated county council care team.
“This is a very worrying time for all those involved and we are taking every possible step to manage the situation sensitively and minimise distress for those affected.”
The council said it had been informed of the closure at “very short notice”.