Suleman wants a fresh start and said in a statement that filing for bankruptcy is what's best for her children, according to the Orange County Register.
"I have had to make some very difficult decisions this year, and filing Chapter 7 was one of them," Suleman said.
The La Habra mother of 14 reports up to $50,000 in assets in federal court filings, which means she owes more than 20 times her net worth.
Suleman is filing Chapter 7 bankruptcy, which means a court-appointed trustee would liquidate her assets to pay off creditors before she is discharged from most of her debts.
Among others, Suleman owes money to her father, the city's water department, DirecTV and Whittier Christian School, where at least some of her children are students.
Suleman also owes more than $30,000 in rent payments on her four-bedroom house.
The home's owner, Amer Haddadin, says his own credit has suffered as he allowed the home to go into foreclosure proceedings by not making the mortgage payments.
A foreclosure auction that was scheduled for Monday has been postponed for a week.
Suleman was in financial dire straits before the January 2009 birth of her octuplets brought her notoriety.
She lived with her mother in a three-bedroom house in Whittier that was in foreclosure proceedings at the time of the octuplets' birth.
The unemployed single mother had been supporting her six other children with the aid of food stamps and Social Security disability payments - sources of income that she continues to rely on.
Since the birth, she has cut deals with media outlets and posed in tabloid photo spreads to get by, touting a book and exercise videos that never materialized.
She earned $5,000 for promoting spaying and neutering for an animal rights group and was paid to take a beating in celebrity boxing matches.
In 2009, Suleman declined a million-dollar offer to appear in pornography.
Last month, semi-nude photos of Suleman ran alongside a paid interview in a British publication - a photo spread she defended in the tabloids, saying she wasn't ashamed of it.
All Suleman's children were conceived through in vitro fertility treatments. Her octuplets are the world's longest-surviving set.