TMZ was first to report the news on Thursday, Nov. 21, and claimed that, according to legal documents, Carter's assets total $8,232.16 and his liabilities total $2,204,854.
"The bulk of the debt is from over 10 years ago when he was a minor and his money was being managed by other people," Carter's rep explained to Us. "Most of that is an IRS tax debt. It's very old debt from when his money wasn't in his control. This is not recent problems that happened in the last couple of years, it's going way back."
But filing for bankruptcy is a step in the right direction for the "I Want Candy" singer. "Aaron is really making smart decisions and taking control of his life," his rep adds. "He's clean and sober, finishing his 75-city sold-out tour. And even though this is a negative story, this really is a positive step for him because it's him being able to put his past problems behind him and move forward."
The younger brother of Backstreet Boys member Nick Carter rose to fame in the late 1990s with the release of his second studio album, Aaron's Party (Come Get It). He completed a month in rehab in February 2011 to "heal some spiritual issues he was dealing with." Since then, he has starred in an off-Broadway production of The Fantasticks in November 2011, and kicked off his After Party Tour -- his first tour in eight years -- in early 2013.
"We see this from a lot of people who earn money in their young life and have other people controlling their money for them," a source close to Carter tell Us. "That's really what this is about: Someone who was famous as a child and the money was not managed the way it should have been. Aaron is really a hard worker."