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.

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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.

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.

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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.