This recently happened to me. Since the beginning of the year I have been trying everything possible to get my nails to grow, including using a formaldehyde-based nail strengthener and various creams. After several months, my nails began to grow, but the nail beds receded, to the point that I grew alarmed. In fact, I finally caught the edge of one nail on a blanket one night and ripped it across, which is what I feared might happen. So ironically, all my efforts to make my nails look better were causing them to get worse.
I went to both my general practitioner and a dermatologist, and here is what they concluded. The nail strengthener could have played a part. So could trauma (I was cleaning underneath the nails too vigorously). Also, a particular cream I was using had antiseptic properties and might be drying them out. They both recommended discontinuing the nail strengthener and cream, and to stop cleaning underneath so much. They told me to continue using a good cuticle oil, such as Solar Oil, and a good hand cream, such as Neutrogena's Norwegian formula. The dermatologist also recommended taking a biotin supplement to help the nails grow faster (5,000mcg per day). I asked if the nail beds would ever grow back, and they said yes. It will probably take a year to find out if they are right or not, though.