Payless ShoeSource on Tuesday announced it has filed for Chapter 11 bankruptcy protection and is closing all 2,500 of its stores in the U.S. and Canada.

The filing came a day after the 63-year-old discount shoe chain began holding going out of business sales.

According to court filings, the company is about $500 million in debt. An estimated 16,000 workers will lose their jobs.

MORE: Payless ShoeSource to shutter all of its remaining US stores

Karen Kern, of North Massapequa, says her family has shopped at Payless for generations.

"It's all I wear," Kern says.

The company's collapse comes as many retailers face a wave of challenges, including declining foot traffic and online competition.

Payless joins a list of other big retailers that have gone bust in recent years. In 2018 alone, that included major chains such as Toys R Us, Sears and Kmart.

Payless will keep open 420 stores in 20 countries, primarily in Latin America. But all of its U.S. stores will close for good by the end of May.