No you are not going to close on time. If the Bankruptcy petition has been filed that stays/stops any pending transactions that are subject to the bankruptcy. To confirm this for certain as I am not an attorney ask your buyer's agent and see if they have in-house counsel. If not, seek the advice of an attorney,
Keller Williams WIlshire
Realtor and Eco Broker
The Reavis Group
Verify that the bankruptcy includes the home you're buying - it almost certainly does.
Check with an attorney about petitioning the bankruptcy court to have this "asset" the house removed from the bankruptcy proceeding.
But, remember, just because everything on the buyer's side has been taken care of you're ready to sign loan documents doesn't ensure that the lender is/was going to complete the sale. It's worth checking the status of the short pay again. It may be that the negotiations between the seller and lender broke down. If so, the bankruptcy filing might help pressure the lender to finalize the sale.
Dilbeck Realtors, GMAC