WASHINGTON -- Chrysler will file for Chapter 11 bankruptcy protection in New York on Thursday and will be eligible for up to $8 billion in federal aid to rebuild the ailing automaker, according to senior administration officials, according to The Associated Press.

The officials say bankruptcy is necessary after talks with some of Chrysler's holdout creditors over the company's $6.9 billion in debt fell apart last night.

The officials requested anonymity because the details have yet been released.

The nation's third-largest automaker has already received $4 billion in government loans.

The officials say they expect the bankruptcy to last only 60 days, giving Chrysler time to finalize a partnership with Italian automaker Fiat.

Chrysler will continue to make cars and honor its warranties during that time.