As many Tennessee residents know, fame and fortune can be fleeting. This is especially true for child stars who may end up never seeing a penny of the money they earn - even though they basically give up their childhood to work 10-12 hour days.
One such former pop sensation - Aaron Carter - was one of the most popular singers a decade ago. Now, at age 25, he owns no home, owes millions of dollars to the IRS and has assets worth just over $8,000. His solution? He filed for Chapter 7 bankruptcy.
Carter was a boy wonder who took the world by storm in the early 2000s. He was a wildly popular teen who had a string of hits and even his own action figure. But his world changed dramatically in 2003 when he found out that his finances had been mismanaged. His manager at the time had bilked him and many other recording artists out of millions of dollars. Carter sold millions of albums worldwide and toured non-stop, but never saw a penny. On top of that, his own mother - who also managed him - took $100,000 from him. He filed for legal emancipation in late 2003.
Fast forward to a decade later. Carter now owes more than $2 million, mostly to the IRS from 2003. Now he is filing for bankruptcy, which may not resolve his tax problems. However, he can get a fresh start as he goes on tour to promote his new single.
Although bankruptcy is not the ideal solution, it can help those with financial challenges improve their short-term situation. It may difficult to get a loan for a decade or so, but after that time, a person's credit can be almost like new and individuals can get a fresh start.
Source: Forbes, "Not Too Young, Not Too Old: Aaron Carter Hopes For Fresh Start Following Chapter 7 Bankruptcy Filing," Kelly Phillips Erb, Nov. 22, 2013