TOYS R Us stores in Australia will continue to operate as normal despite the US based toy giant filing for bankruptcy protection.

The company has filed for Chapter 11 of the Bankruptcy code in the US and Canada that will allow a restructure of its finances amid billions of dollars in debt.

Toys R Us said its 1,600 Toys R Us and Babies R Us stores and online operations around the world will continue to trade as normal.

"The company's operations outside of the US and Canada, including its operations in Europe and Australia and its approximately 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing," the company said.

Toys R Us expects this process will enable it to restructure its outstanding debt, which will provide greater financial flexibility for it to invest in growing the company.

The Chapter 11 filing, to restructure $US5 billion ($A6.3 billion) of long-term debt, is among the largest ever by a specialty retailer and casts doubt over the future of the company's 64,000 employees and nearly 1600 stores, which remain open.

The collapse of the largest US toy store chain came swiftly. Reports earlier this month that the company hired a law firm that specialises in bankruptcy set off "a dangerous game of dominoes", David Brandon, the company's chief executive and chairman, said in a court filing.

Ten days later, nearly all the company's vendors refused to ship products without cash in advance, forcing Toys 'R' Us to scramble to raise $US1 billion for its nervous suppliers, according to court filings.

The timing could not be worse Toys 'R' Us is building inventory for the holiday season and fourth quarter, which accounts for 40 per cent of net sales.

Toys 'R' Us received a commitment for over $US3 billion in debtor-in-possession financing from lenders including a JP Morgan-led bank syndicate and certain existing lenders, said the Wayne, New Jersey-based company, which also operates the Babies 'R' Us chain.

Chief Executive Dave Brandon said in court filings that he hoped Chapter 11 would enable the company to address the financial constraints that "have held us back" in a "lasting and effective way".

The company said it plans to spend $US64.8 million before 2022 to make it more enjoyable to shop in its stores.

Toys 'R' Us did not enter bankruptcy with the usual plan for store closures, a possible indication that the timing of the bankruptcy was beyond the company's control.