Chrysler LLC may be the first of the major automakers to be forced into chapter 11 bankruptcy if today’s rumors are correct. The New York Times is reporting that the Treasury Department is in the final stages of preparing the chapter 11 bankruptcy plan for Chrysler. The company has an April 30th deadline put in place by the Treasury to draft a restructuring plan that would show the company has viability for the future. Chrysler has had no comment regarding any possible plan, and the company declined to comment today on the rumors that the government may be setting up a bankruptcy plan for it.

The New York Times says that Treasury has reached an agreement with the UAW union, whose members’ pensions would be protected in the bankruptcy plan. The final issue to figure out seems to be what to do with Chrysler’s lenders. There is currently $6.9 million worth of Chrysler debt being held, so that is definitely an important issue to a lot of people.

Some believe that Treasury taking the final steps to set up a bankruptcy program may be its way of forcing the lenders hand in an attempt to lower Chrysler’s overall debt. Clearly the lenders now have a big decision to make, and I’m guessing they won’t take it lightly at this point.

Years ago a bankruptcy of a company like Chrysler seemed like an absolutely ridiculous proposition, but now it truly is reality. The other harsh reality is that General Motors may not be far behind at all, and if General Motors is forced into chapter 11 bankruptcy many more people will be affected. I believe the government realizes that drastic measures must be taken and that taxpayers cannot be counted on to continually foot the bill of companies that are losing money so quickly. Would this be the right move for the American economy and the global economy? That’s the million dollar question that so many people have right now!