Having a famous name doesn’t always mean there’s money in the bank.
Former kid pop star Aaron Carter, 25, has filed for bankruptcy, claiming to have tax and credit debts exceeding $3.5 million while possessing just $8,232.16 in assets — just $977.16 of that in accessible cash, according to documents obtained by omg!.
Carter, the younger brother of Backstreet Boy Nick Carter, says in his court filing, dated Oct. 23, that he owes $2,204,654 to creditors, including a $1,307,648 income tax debt to the IRS, and a $31,166 American Express bill.
“Aaron filed for Chapter 7 bankruptcy protection to alleviate past issues in an effort to move forward with his life and career,” his rep tells omg! in a statement. “The overwhelming majority of the debt he is asking to be discharged is from more than 10 years ago when he was a minor and not in control of his finances.”
Chapter 7 is the most aggressive form of bankruptcy, requiring liquidation of most assets, and absolving the petitioner of the bills they owe (aka creditors will not recover the funds). The big downside is that a filing for Chapter 7 will stay on one’s credit report for 10 years.
Carter‘s finances were handled by his parents: his dad acted as business manager, and mother was his manager. As Aaron told it earlier this year: “There was lot’s of money made, hundreds of millions of dollars.” But, eventually problems arose between the singer and his folks about where that money was going. “When I was 13-14, I started paying attention to what my mom and dad were doing [with my money], and I wanted to know about stuff. I started getting familiar about taxes. … I was becoming very inquisitive and my parents didn’t like that.” He eventually cut business ties with his parents.