Chrysler filed for bankruptcies or bankruptcy because Chrysler was impacted by the automotive industry crisis of 2008–2010 which had contributed the Chapter 11 reorganization.
Along with high gas prices and high interest rates, the inevitable started happening at Chrysler which was falling sales.
While its competitors, Ford (F) and General Motors (GM), were affected as well, they were much larger and were better able to withstand a fall in sales compared to Chrysler.
After creditors refused to restructure the company's debt, Chrysler filed for Chapter 11 bankruptcy protection in April 2009.
Two months later it finalized its deal with Fiat, which acquired most of Chrysler's assets and took an initial 20 percent stake in the automaker.
The 2007–2008 financial crisis played a role, as GM was unable to obtain credit to buy Chrysler.
Sales fell further as consumer credit tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car.
Chrysler: repaid $9.2 billion, fulfilling its debt obligations to the U.S. and Canadian governments, and is now owned by Italian automaker Fiat (58.5%) and a health care trust for UAW retirees (41.5%). Overall, taxpayers lost $1.3 billion on the Chrysler bailout.
On January 7, 1980, President Jimmy Carter signed the Chrysler Corporation Loan Guarantee Act of 1979 (Public Law 96-185) into law.
The Act granted to Chrysler $1.5 billion to save the company from bankruptcy.