If a business closes but owes creditors, what is the best way to set-up a repayment plan?

The only way that someone *might* go to jail over debts would be if he committed fraud--that is, if he incurred the debts claiming that he would repay them, but all the while intending that he would never do so. (So basically, intending to steal the money.) As long as the debts were legitimate when incurred, then even if circumstances later were such that repayment was impossible, there would be no criminal intent, no criminal act, and no jail.

In terms of setting up a payment plan, that's simple--just negotiate one. If the debts were incurred by an LLC, all that creditors could reach are LLC assets, so your personal assets should be safe (except to the extent your husband may have personally guaranteed them). In that case, while you are to commended for intending to repay now that the LLC is out of business, there's little creditors can do to force repayment. Therefore, just negotiate a plan that works for you.