Your situation isn't as bleak as you might think. Don't worry. You took a risk and it didn't work. You will be able to get a job, pay off your debts, then try again if you'd like.

I think you have a good plan there. Be sure to list your startup on your resume-it's two years of valuable experience. If you're embarrassed that you've "failed", list yourself as an employee of the startup and say it went under. I'm willing to bet that 9 out of 10 employers won't even ask if it was yours.