Anne Lawton said it's been like the elephant in the room for months.

"I thought it's been pretty likely for awhile," Lawton said. "It's looking like they're going to go in."

And now that a GM bankruptcy has gone from a mere possibility to probability, Lawton, an MSU law professor and bankruptcy expert, said it's time to prepare for the worst.

"Contracts not performed on both sides can be rejected, the collective bargaining agreement is an example," she said. "It's possible the collective bargaining contract will be rejected. So too could the retiree health care benefits be modified as well as employees' pensions."

It's the "anything goes" mentality in bankruptcy proceedings that's got GM employees like Alex Hernandez concerned.

"My health care, my rate of pay and the retirees pensions, those are the three things that go through my head," Hernandez said.

Hernandez said GM workers have only heard second-hand reports of a possible filing, and it's the unknown that's the worst pill to swallow.

"My bosses don't even know what's going on," Hernandez said. "This is going to affect everyone, blue collar workers, white collar workers, retirees like my dad, and my friends that just left."

Lawton doesn't sugar coat anything -- bankruptcy will be tough -- but she said it doesn't have to be an end.

"I think that was a mistake [GM] made from the beginning, painting bankruptcy as if the sky is falling," Lawton said. "Had they done it differently , they might have less work to undo it."

The federal government has offered to back warranties of new cars, to combat the stigma of 'buying a car from a bankrupt company.'