Eastman Kodak, the company that invented the hand-held camera, has filed for bankruptcy protection.
The move gives the company time to reorganise itself without facing its creditors, and Kodak said that it would mean business as normal for customers.
The company has recently moved away from cameras to focus on making printers, to try to stem its losses.
The 133-year-old firm has struggled to keep up with competitors who were quicker to adapt to the digital era.
"Kodak made all its money from selling film, then the digital camera came along and now no-one's buying film. It's not like they didn't see it coming. Kodak hesitated because they didn't want to eviscerate their business," said Rupert Goodwins, editor of technology website ZDNet.
Announcing the move to seek bankruptcy protection, Antonio Perez, Kodak's chairman and chief executive, said: "The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak."
The company said it had already arranged a $950m (£615m) credit facility from Citigroup to keep it going.
The bankruptcy protection move by Kodak affects its operations and companies in the US, but the company said its non-US subsidiaries were not included in the move and would continue to operate as usual.
