The struggling subprime mortgage unit of Detroit-based Ally Financial Inc.
may file for bankruptcy as early as next week.
Ally, the nation's largest new car lender, is 74 percent owned by the U.S. Treasury as part of a $17.2 billion bailout.
The move could help Ally repay the rest of its bailout — and launch a long-stalled IPO.
Government officials have told Ally they do not object to a bankruptcy filing by the troubled mortgage unit known as Residential Capital LLC. Officials have said a court restructuring may help the government recover more funds for taxpayers.