In terms of your existing business debts, a lender is not going to allow the transfer of the liability over to a new entity unless you`ve already given a personal guarantee.
Once you do form the new entity, make sure you follow all of the corporate formalities - separate bank accounts, accurate corporate records, etc. What you don`t want to happen in a lawsuit is for a plaintiff to "pierce the corporate veil." For example, you create a new entity, transfer your assets to the new entity then file personal bankruptcy. A court might hold that the transfer was not legitimate.
The rules for "piercing the corporate veil" vary by state. In certain states, e.g. California, it is much easier.Make sure that when you do set up the new entity, you are doing so for valid reasons.
Ed Baloga, CPA / MBA