We discussed how this could possibly be used to settle the debts.

They mentioned they may go bankrupt so they don't have to pay the debts, and I referred them to this article:

Redundancy and Redundancy Payments

Most of us know what being made redundant is, and unfortunately that number is growing.

Redundancy is where an employer needs to reduce their workforce, or the number of people working for them. This may be due to the business closing down, or a loss of contracts or work, or for a variety of reasons.

If you are made redundant, you are entitled to a redundancy payment from your employer. This payment is a lump sum, and is based on the number of years you have worked at your job, and what you were earning. You have to have been working at your job for two (2) or more years to qualify for this lump sum payment.

The calculation for statutory redundancy pay is based on a few factors:
how long you have been continuously employed
your age
your weekly pay, up to a certain limit (£400 current maximum)
You will get:
0.5 week’s pay for each full year of service where your age was under 22
1 week’s pay for each full year of service where your age was 22 or above, but under 41
1.5 week’s pay for each full year of service where your age was 41 or above

There is an online calculator to help you do this at the direct.gov.uk web site. www.direct.gov.uk/redundancy.dsb

As you can see, people could receive a substantial sum of money, money which could be used to pay off or settle the debts they may have.

It is understood it may take someone time to find another job, and the money can be used to support oneself and keep going, but if you have a large amount of debt, you may be able to pay off the debts, or settle them through a full and final IVA or other type of settlement.

If you decide bankruptcy is your best option, receiving the redundancy money may not be the best thing as it can be taken for the bankruptcy. It can all be in the timing of when you go bankrupt, and when you receive the lump sum payment.