Borders Group Inc , the second-largest U.S. bookstore chain, filed for Chapter 11 bankruptcy protection, after years of sharp sales declines that made it impossible to manage its crushing debt load.

Borders had liabilities of $1.29 billion and assets of $1.28 billion as of December 25, according to documents filed on Wednesday with the U.S. Bankruptcy Court in Manhattan.

Sales at Borders declined by double-digit percentage rates in 2008, 2009 and in each quarter in 2010 it has reported.

Its inability to garner significant online business and its near absence from the growing digital books market have made it difficult for Borders to compete with larger rival Barnes & Noble Inc and online retailer Inc .

(Reporting by Phil Wahba and Santosh Nadgir)