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.

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