NEW YORK - Analysts are predicting that movie rental chain Blockbuster could file for bankruptcy as early as next month, TheStreet.com reports.

The company met earlier this month with its senior debt holders and six major movie studios, discussing a preplanned bankruptcy.

TheStreet.com said that for Blockbuster to continue business uninterrupted, it would be essential for it to receive the continued support of movie studios.

A preplanned bankruptcy would last about five months and allow the chain to break leases at some of its underperforming stores, which could lead to a closure of up to 800 locations.

The retailer is due to repay $42 million from its escalating $1 billion debt on September 30, which could lead to a bankruptcy filing as early as mid-September. It has already postponed the payment two times.

"The company does not have enough assets to cover its debt, and debt is superior to equity in bankruptcy," said Wedbush analyst Micael Pachter. "This is not a liquidation, so shareholders won't be wiped out, but in the reorganization, it's unlikely that shareholders will get much more than a hope that the company can recover, repay all of its debt, and return to a positive equity value."

The company recently reported a second quarter loss of $69 million, significantly larger than what analysts had expected. Its revenue has dipped 20 percent to $788 million from $982 million.

Blockbuster has attributed its popularity decline to worse-than-expected results from closing its stores, fewer store customers, and a nearly 30 percent drop in average subscribers to its by-mail service.

Despite the economic uncertainty, the company has continued its operations without pause, announcing plans to roll out more DVD kiosks, adding video games to its by-mail service, and teaming with Comcast to launch DVDsByMail.com, which grants Comcast subscribers a discount for its mail service.