"This is not a negative thing," Carter publicist Steve Honig told CNN. "It's actually very positive. It's him doing what he needs to do to move forward."
The U.S. government is Carter's biggest creditor, according to the petition. He owes the Internal Revenue Service $1.3 million in back taxes from his income in 2003, when Carter was just 16.
"The bulk of the debt is from over 10 years ago when he was a minor and not in control of his finances," Honig said. "This has happened to a lot of people who had fame at such at a very early age."
Carter is left with very little to show for his early success, according to his bankruptcy petition. He had just $60 cash in his wallet and $917 in his checking account when he signed the petition last month. His bank savings account held just $5.
His personal property includes a 61-inch flat screen TV and his cell phone, all valued at just $500. He does wear a $3,750 Breitling watch. Clothing, two laptops, a guitar and a Louis Vuitton backpack put his fortune at just $8,200.
Carter owns the publishing rights to the songs he wrote -- "Saturday Night" and "One Better" -- but he doesn't currently get any royalties from them, the filing said.
Still, Carter is going "in the right direction" and "really working his ass off," Honig said.
He acted in more than 400 performances in the off-Broadway cast of "The Fantasticks" last year.
He's currently on a 75-city tour of the United States, but the petition said he's only earning about $2,000 a month for those performances. That money ends when the tour ends in December.
Carter's expenses are just $2,000 a month since he's living with a relative in Port Richey, Florida, when he's not on the road, it said. He dealt with substance-abuse issues, but Carter's been "completely clean of quite some time," Honig said. He spent time in drug rehab two years ago.
Carter's "really gotten his act together and is really doing well," his publicist said.