Colorado pop music fans may remember Aaron Carter. The younger brother of one of the Backstreet Boys, Carter was a teen heartthrob at the turn of the millennium, with several hit singles behind him before he was old enough to legally drive. Since then however, personal and professional setbacks have interfered with his music career. Recently, he filed for Chapter 7 bankruptcy protection in an effort to put his financial problems behind him.
Now only in his mid-twenties, Carter has had serious tax debts dating back to the time when he had large amounts of income. Some of these debts may have been the result of bad management. His former manager is now serving time in prison after pleading guilty to conspiracy and money laundering charges.
Chapter 7 is a powerful tool for discharging many types of debt and recovering financial security. However, it is considered a relatively extreme measure for an individual because it requires asset liquidation. Courts allow those who file for Chapter 7 protection to get out of debt and avoid creditor harassment, but in order to pay off some of their outstanding debts, they must sell off many of their possessions. There are also many technical requirements for certain types of debts, including tax debts.
While it is somewhat uncommon for such a young person to file for Chapter 7, youth does have an advantage in that it allows a person more time to recover. Carter has been touring as a performer, and has said he looks forward to restarting his career. Colorado residents who are struggling with debt can consult with a qualified attorney to learn whether Chapter 7 or another form of debt relief can help them.
Source: Forbes, "Not Too Young, Not Too Old: Aaron Carter Hopes For Fresh Start Following Chapter 7 Bankruptcy Filing," Kelly Phillips Erb, Dec. 22, 2013