The singer has followed in the footsteps of his bandmates Duncan James and Simon Webbe, who declared themselves bankrupt within weeks of each other last year (13).
Costa, who welcomed his first child in June (14), tells Britain's The Sun newspaper, "I am really proud to be a father and the arrival of my new daughter has made me take a good look at my finances... I want to be sure I can provide the best possible future for my family.
"Our former management made a lot of decisions that we as a band have had to be financially responsible for. Whether right or wrong, their personal pursuit in the last two years had led me to instigate proceedings to wipe the financial slate clean and start again."
The band plans to release new material later this year (14) and Webbe has signed on for the latest series of reality Tv competition Strictly Come Dancing.