The former striker, who also played for Celtic and Dundee United, was declared insolvent after failing to settle large bills.
The majority of the cash is owed to the taxman and relates to investments made in a film production scheme.
The 49-year-old became a football agent after retiring from the game but quit to take up a coaching role with Dundee United in 2013.
However, he left his role at the Tannadice club in September when manager Jackie McNamara was sacked.
Jackson applied for his own bankruptcy after running up debts of £270,000 and it was approved by the Accountant In Bankruptcy, Scotland’s insolvency service, earlier this month.
A bankruptcy trustee, David Rutherford of Edinburgh-based insolvency specialists Cowan and Partners, has been appointed to take control of his assets and try to recover money owed to creditors.
He said: “The fact that he has had to apply for bankruptcy shows that Darren’s finances are not in a great state at the moment especially since he lost his job at Dundee United.
“We will be working with Darren to try to sort this out by identifying his assets and recover money owed to his creditors.
“We had initial discussions with him and the whole process is expected to take about four years.”
Jackson, of Falkirk, has declared that he has no assets available to help pay off his creditors. He declined to comment.
Jackson is listed as a director with Eclipse Film Partners No.9, a scheme which allowed investors the opportunity to claim tax relief through investing in the production of movies.
During his career, Edinburgh-born Jackson also had spells at Newcastle, St Johnstone, Coventry and Hearts.
He was capped 28 times for Scotland, scoring four goals and was part of the squads for Euro 1996 and the 1998 World Cup.
He has recently been working as a football pundit and appeared on BBC’s Sportscene programme last week.
During his time at Celtic, Jackson had to undergo a brain operation after falling ill at the team hotel before a European tie.
He was treated for hydrocephalus, also known as water on the brain, in September 1997 and needed emergency surgery but was back playing first-team football for Celtic within months.
During his time as a football agent he represented Old Firm stars including Mark Wilson and Steven Thompson.
He joins a list of former Old Firm stars who have gone bust in recent years including Chris Sutton, Craig Beattie, Colin Hendry, Kevin Drinkell and Bobby Petta.
Earlier this week Jackson’s former agent John Viola was made bankrupt over an unpaid £225,000 tax bill.
Viola was declared bust at Hamilton Sheriff Court following a dispute over cash he had ploughed into a film investment scheme.