This Is How Aaron Carter Lost All Of His Money
Although singer Aaron Carter's career came on the heels of brother Nick Carter's Backstreet Boys fame, the young star carved out his own niche in the late 1990s pop scene, launching him to teen heartthrob status. Yet while Aaron managed to emerge from Nick's shadow, darkness continued to haunt him in later years as he battled substance abuse and bankruptcy. According to People, the "That's How I Beat Shaq" singer filed for Chapter 7 bankruptcy in November 2013 to cover the more than $3.5 million debt accrued before he became an adult and gained control of his personal finances.
"The overwhelming majority of the debt that he's asking to be discharged is from more than 10 years ago, and that was when he was a minor and not in control of his own finances," Aaron's publicist Steve Honig told The Hollywood Reporter that year. "So this is a problem that's existed for a long time that he's now made the decision to do something about in order to be able to move forward with his life."
Honig added that, in the years leading up to his bankruptcy, Aaron had "done a lot of things to put his life back together," and while he had issues with substance abuse, "he's been clean and sober for awhile [and] he's now taking care of his finances." Unfortunately, that meant forfeiting much of his property to cover the $1.3 million in back taxes from 2003 and $30,000 in credit card bills, among other debts.
Aaron Carter's income enabled his family's lavish lifestyle
Before Aaron and Nick Carter became pop sensations, their family was broke and couldn't afford a home of their own. But once the young pop stars began to earn hefty paychecks, parents Bob and Jane Carter used the money to improve their lifestyle. "We had this massive compound, with, like, 12 houses on it," Aaron told Oprah's Where Are The Now — Extra in 2016 (per HuffPost). "It was worth over $10 million, and I had paid a lot of that money." However, Aaron revealed that he "never got any of those returns back or anything like that... Even at this point, I've never even owned my own home," because his family left him empty-handed.
"There was a lot of neglect on my parents' part. They didn't do a lot of things right," Aaron explained. "Under the Coogan Law, [my parents] were supposed to be putting 15 percent of my money into my Coogan Account. I got, like, $2 million when I turned 18 years old. I should have had at least $20 million in my account." These mistakes also left Aaron with unprecedented debt. "When I turned 18, I got $2 million in trust-fund money," he told GQ in 2016, "and I got $4 million in taxes my parents didn't pay when I was 11 and 12 years old."
But instead of forcing his parents to face punishment for tax evasion, Aaron filed for bankruptcy to avoid the looming consequences.
Aaron Carter's debt was ultimately erased by the judge
While Aaron Carter didn't want to "endure public humiliation [of] people thinking that [he's] broke," the "I Want Candy" singer filed for bankruptcy because he didn't want "people thinking [his] parents broke child-labor laws" either. "I was like, I can handle this. I love my mom and dad, and they are responsible for giving me my career," he told GQ in 2016. "And I still have one today. So I'll file for bankruptcy, and I'll pay 25 cents on the dollar for every cent I pay back."
But Aaron was in luck because, while most people file for Chapter 11 or Chapter 13 bankruptcy, he was granted Chapter 7 bankruptcy, which meant his entire debt was discharged. "I said to the judge, 'I'm here today because this is my story' — and I ran through it like a timeline, just like I did with you — and he said, 'You know what, I'm going to give you a Chapter 7. Boom. Get out of my courtroom. You have no debt, and your credit score is back to 750. And you have no debt and neither do your parents,'" Aaron explained to the magazine. "And he said, 'Your parents better thank you for this.'"
However while Aaron was able to put this unfortunate chapter of his life behind him, the singer has faced many struggles in the years after his outstanding debt was resolved.
Aaron Carter begged fans for donations amid fears that his family wanted to 'take [his] life'
In recent years, the bad blood between Aaron and brother Nick Carter has caused added turmoil for the "Aaron's Party" singer. After "alarming behavior" compelled Nick to file a restraining order against Aaron, Aaron took to Instagram to express fear for his safety in video posts that have since been deleted. Yahoo reported that Aaron claimed his family and Sony Records were conspiring to kill him, so he launched a GoFundMe in November 2019 to raise $100,000 in an effort to "get myself out of California immediately" and "move to an undisclosed location where I am safe."
"I have become a silence breaker," Aaron reportedly wrote on the fundraiser page, which has since been deleted. "And it has come to my attention; with factual information that my family is out to get a conservatorship or set things up to make it look like I have killed myself... I am owed $3.5 million dollars from Sony records. There is a conspiracy that my family wants to take my life to take my money and when I die, they will have all rights to my money and assets."
While the singer's accusations remain unsubstantiated, fans are worried that Aaron's history of mental illness has compromised his current grasp on reality.
If you or someone you know is struggling with substance abuse and mental health, please contact SAMHSA's 24-hour National Helpline at 1-800-662-HELP (4357).