Walter's turned out to be a good-for-nothing (7)
I believe the answer is:
wastrel
'to be a good-for-nothing' is the definition.
(I've seen this before)
'walter's turned' is the wordplay.
'turned' indicates an anagram.
'walters' with letters rearranged gives 'WASTREL'.
'out' is the link.
(Other definitions for wastrel that I've seen before include "Layabout" , "Useless person" , "Profligate" , "Person who dissipates resources self-indulgently" , "A useless, good for nothing fellow" .)