Overwhelmed with $576 million in debt, hospital operator LifeCare has filed for Chapter 11 bankruptcy protection and plans to sell itself.

The Plano, Texas, chain runs 27 long-term hospitals in 10 states, including the Complex Care Hospital of Idaho at 2131 S. Bonito Way in Meridian, near the corner of Eagle and Overland roads. LifeCare said it will continue to do business and pay its employees through the bankruptcy process.

The company, owned by private equity firm Carlyle Group LP, said it has agreed to be bought by a group of its senior secured lenders, but hopes to see what results from an auction supervised by the bankruptcy court.

According to a bankruptcy court filing, LifeCare had $575.9 million in debt and $422.2 million in assets. Its biggest creditor is U.S. Bank, which owns $128.1 million in senior notes.

Carlyle Group bought LifeCare for $570 million in August 2005. Weeks later, three of the company’s hospitals in New Orleans were destroyed by Hurricane Katrina.

In a bankruptcy court filing, LifeCare said it business has also been hurt by cuts in Medicare payments that were instituted in 2006 and 2007, and by a 2007 moratorium on construction or expansion of long-term acute care facilities.

In 2011 the company paid $131 million as it bought six hospitals to expand its business. Those deals have added to its profit, but not as much as the company had hoped, and its senior notes will mature in 2013.

“Over the course of the first quarter of 2012, it became evident to the board and management that the hoped-for growth and greater regulatory certainty would not materialize in a timeframe that worked for the company,” LifeCare said.

Complex Care Hospital of Idaho is one of two so-called long-term acute-care hospitals that opened in the Treasure Valley in 2008. The other is the Southwest Idaho Advanced Care Hospital, a 40-bed hospital at 6651 W. Franklin Road near Boise Towne Square mall. Complex Care Hospital of Idaho has 60 beds.

The hospitals typically provide care to people who need help breathing or require other care too complicated for nursing homes. They provide that care less expensively than general hospitals do. The hospitals serve all ages, but typically get elderly patients who have run through their Medicare benefits for single visits at the general hospitals. Some patients go home when they leave, while others go to assisted-living facilities, rehabilitation hospitals or nursing homes.

Ernest Health Inc., based in New Mexico, owns and operates Southwest Idaho Advanced Care Hospital.

LifeCare said Tuesday that it has secured $25 million in financing from JPMorgan Chase, although that financing must be approved by the bankruptcy court. The company has around $20 million in cash on hand.