Toshiba's US nuclear power plant firm Westinghouse could file for chapter 11 bankruptcy as early as tomorrow, Reuters reports.
However, the insider told the news agency that it remains to be seen whether the complex filing can be submitted this week.
"A March 28 filing is one proposal," the source said. "The thinking is that it would great if we could pull that off but whether it goes that well or not, is another issue."
Toshiba reportedly informed its creditors last week that Westinghouse would file for bankruptcy.
The move would expand the writedown at Westinghouse in the current financial year to $9 billion, a significant increase on the $6.3 billion previously suggested.
However, bankruptcy could stem future losses at Westinghouse, which has been plagued by massive cost overruns at two US power plant projects.
The problems at the US unit have spread to Toshiba, which bought a 77 percent stake in Westinghouse for $5.4 billion in 2006.
The Japanese behemoth has been forced to put its memory chip business up for sale, consider selling Westinghouse and twice delay reporting its earnings to the Tokyo Stock Exchange, which ran the risk of the conglomerate being delisted.
Westinghouse has not turned a profit since 2013 on the back of the fallout related to the Fukushima nuclear disaster and a series of cost blowouts related to the construction of reactors in the US.
Toshiba warned investors to expect a large one-off loss linked to a 2015 Westinghouse deal to buy the Stone & Webster nuclear construction business.
Last month, Toshiba revealed a $6.3 billion writedown related to the acquisition.
Toshiba later delayed announcing its results to the Tokyo Stock Exchange due to a disagreement with its auditors over the size of the writedown.
The company has been given permission to delay reporting earnings for a second time, with Toshiba's new deadline set for April 11.