If it's an S-Corp then you are protected personally - you don't necessarily need to file bankruptcy but I also wouldn't pour anymore of your money into it if it is jeopardizing your personal finances. Talk to the vendors, explain the situation and then talk to your co-founder and come up with a plan to pay it off through the company (consulting, selling assets, etc)

I don't understand. You're in USA? It is supposed that you can fail in USA. That's capitalism!. Why do you want to pay those debts? Your company is bankrupt and it has to be declared bankrupt then go into liquidation in order creditors recover their money. Those are the rules of this game.

You are protected under a C-Corp, unless they can pierce the corporate veil in court (unlikely if you didn't do anything you weren't supposed to do) you can walk away and the only assets any of the creditors can go after are those of the company. All of your personal assets are free and clear.

From Visa/Mastercard through the merchant account. My SSN is listed as the account owner.

Any time a merchant account is closed for cause, such as having too high a chargeback rate, the underwriting bank has a contractual obligation to place the merchant in the TMF (Terminated Merchant File) and MATCH list. Both the company AND the names/SSNs of the principals of the company are listed. This is intended to protect other banks -- so that a company with a history of payment fraud or other problems can't simply go bank to bank as each account is closed.

This is what would be scaring me more than any of the debts. Almost no bank will open a new merchant account for him if he's on TMF/MATCH, and that includes if he's just one of several owners of a future company -- merchant account applications ask for a list of all principals for just this reason. He'll find his way out of the debt problem, whether it's through bankruptcy or repayment, but being listed on TMF/MATCH can prevent him from starting a new business that accepts credit cards for the rest of his life.