The fate of the Detroit troubled automaker will be known tomorrow as President Obama is expected to make an announcement at 11:30am EST.
Chrysler dealers have hired lawyers to represent them in bankruptcy proceedings, according to CNBC reports.
The move comes just a day before Chrysler's deadline for securing a deal with Fiat SpA in order to qualify for the $6 billion in U.S. government loans and keep Chrysler out of bankruptcy court.
President Barack Obama, speaking at a town-hall style event near St. Louis, said earlier Wednesday that he didn't know if a deal to save Chrysler would be completed.
We're hoping that you can get a merger where the taxpayers will put in some money to sweeten the deal but, ultimately, the goal is we get out of the business of building cars, and Chrysler goes and starts creating the cars that consumers want, he said.
Since January 2009, Chrysler has borrowed $4 billion from the government and is in danger of completely running out of cash if it does not get a quick boost soon.
Chryslers restructuring plan was previously rejected in March and the automaker was given 30 days to come up with a second option.