After missing a $12 million debt payment, JCPenny (JCP  ) may be headed towards bankruptcy. JCPenny is one of many retailers suffering under massive piles of debt during the already dire pandemic lockdown. In ordinary times, debt is considered something of a necessary evil, but with stores and supply chains shutting down across the country, some are having to face the music.

JCPenny announced last Tuesday that they would not be making a $12 million interest payment due on April 15. The company is now entering a 30-day grace period.

"JCPenney made the strategic decision to ... take advantage of the 30-day grace period to continue ongoing discussions with lenders and maximize financial flexibility," the company said in a statement. "JCPenney has been engaged in discussions with its lenders since mid-2019 to evaluate options to strengthen its balance sheet, a process that has become even more important as our stores have also closed due to the pandemic."

JCPenny is now considering debt restructuring and filing Chapter 11 bankruptcy. The retail chain says it was keeping up with its debt repayment until it had to close its stores to help stop the spread of COVID-19.

"The company successfully met or exceeded guidance on all five financial objectives for 2019," the company's statement reads. "We remain focused on our plan for renewal, and look forward to when we reopen our doors."

However, CNN reports that JCPenny's troubles started long before the novel coronavirus arrived. The chain carried a staggering $3.7 billion in debt at the end of 2019. JCPenny has enough liquidity to stay in business for the next several months, but it may not be able to survive long after that.

"There's a good chance they can survive, but this is no layup. This is going to be a three-pointer deep in the corner with time running out," said Craig Johnson, president of Customer Growth Partners.

According to USA Today, JCPenny is far from the only retailer in the red. Sears, one of JCPenny's largest rivals, filed for bankruptcy in late 2018, and Neiman Marcus may be close behind Sears with even more debt than JCPenny. Consumers have been losing interest in department stores and malls for some time now.

JCPenny currently holds $4.2 billion in debt, according to Moody's Investor Service. S&P Global Ratings shows JCPenny with a credit rating of CCC and a negative outlook. The retailer currently owns about 850 stores, but experts say that number will need to drop if the company is to stay in business.