Sears is likely to announce as soon as Sunday that it will file for bankruptcy protection, with plans to push through the holiday season, then seek a buyer soon after, says a person familiar with the discussions but not authorized to speak about them.

The beleaguered retailer, which has stayed afloat by closing stores and borrowing hundreds of millions of dollars from a hedge fund helmed by its own CEO, is leaning toward a Chapter 11 filing, which would provide it protection to restructure versus having to immediately liquidate.

It is trying to secure $300 million to $500 million to continue functioning through the holidays, keeping a winnowed number of locations open, says the person familiar with what is being considered. As of an Aug. 4 public filing, Sears Holdings, the parent company of Sears and Kmart, still had 506 Sears stores and 360 Kmart locations.

If the bankruptcy filing occurs, it is likely the beginning of what has been the long, drawn-out ending to one of the most renowned sagas in retail.

Sears, once the nation's largest retailer, has been on the ropes for years, struggling to remain relevant amid a shopping landscape transformed by the rise of e-commerce competitors such as Amazon, big-box giants such as Walmart and specialized chains such as Best Buy, which offer similar products with a more appealing experience.

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Now, Sears is facing a critical Monday deadline to make a $134 million debt payment. Reports this week by the Wall Street Journal and CNBC said Sears had begun consulting with advisers to prepare a possible bankruptcy filing.

Sears CEO Eddie Lampert said last month in a letter that the company "must act immediately'' on his most recent proposal to sell more assets and slash debt.

Lampert had offered to buy Sears' popular Kenmore appliance brand for $400 million.

Reports of the potential court filing seemed to please investors, with the company stock price spiking 18.09 percent – though that amounted to just 40 cents a share.