Converting Personal Accounts to Business Accounts

 
If a business owner, operating as a Sole Proprietor, incorporates the business, what does he/she do with the personal debt acquired for the sake of the business?  In many cases, credit card companies and vendors that issued credit to a sole proprietor will open a new account under the business identity and Federal Tax-ID/EIN and transfer the debt to the new corporate account.  Because the owner of a corporation is separate from the company’s corporate identity, doing so removes the liability of debt from the owner’s personal credit, and can patch the hole that was created when the sole proprietor by pierced the corporate veil and assumed responsibility for the business debt.
Another option is to acquire a loan via alternative financing - through a private investor, hard moneylender, angel investor, etc.  By doing so, a business owner can pay off the debt in his/her name with the proceeds of the loan; and in doing so, transferring the liability to the business.