The Hills alum, 26, began dating the millionaire internet entrepreneur, 28, over the summer. The pair went on a break in late September, according to the source, but reconciled shortly after.
The couple began having problems in late August after Chabbott ran over a New York City police officer's foot in his $257,000 Ferrari Spider; the Manhattan District Attorney's office later dropped felony assault charges against the Linesnob app inventor, though he now faces two misdemeanors.
"The Ferrari incident should have been a red flag for her, but he said it taught him a lesson, so she gave him another chance," a source close to Pratt says. "But he just turned out to not be the right guy for her."
"[They were] serious and lived together in NYC," the source adds. "Stephanie has since moved back to her home in LA."
Still, Pratt has no hard feelings toward her ex. "I wish him well and I hope we can be friends," she tells Us.
In fact, the newly single star seems to have found the silver lining in her recent split. "Donating my ex's clothes to my local cleaners for Sandy relief," the Starz Entertainment host tweeted Nov. 14, to which her former Hills costar Lauren Conrad replied, "This is why I love you."