First, you loaning her money is out of the question. In my sternest Suze Orman voice, You Will Not.
Money is more intimate than sex, and there is a very wide gulf between "listening to her commiserate" and putting your own skin in the game.
Keep all liability firewalls up at full force
There are several types of liability shields which are built into the financial system for your protection. Use them to the max. Don't break them.
With rare exception, creditors can't touch the corpus of 401k or SS money, and in some states IRA money either. So don't you dare withdraw big chunks of that principal to pay off debt! That money is shielded and cannot be touched unless you are stupid.
The most basic liability shield is between you and her. Debt does not pass to relatives, unless the relative volunteers for that. Naturally every creditor really wants you to. Ergo you are not going to give her money in any way that would attach you to it. Like paying it off.
Use trustee structures
There is a legal structure that allows one person to manage the financial affairs of another person. It's most commonly seen when someone dies and an executor is appointed to wrap up the financial affairs of the deceased. However living people can have this too. They don't need to be incompetent, just willing.
This gives you the ability to take charge of the debt without having to touch it. The trustee has zero personal liability for the debts of the trust, unless he catastrophically messes up or tries to steal.
Don't even think of doing some sort of informal, ad-hoc halfway pretend version of this that's based on mutual understanding and lies. Do it with a judge or don't do it at all.
What does this do for you?
First, the trust gets a mailbox, gmail and vumber (eg Google Voice) and you give a formal change of address to the creditors. Now, if you strategically decide to stop paying them, and they cry and moan and blow up your phone, they won't bother her, they'll bother the trustee.
Second, when creditors try all their psyched out pressure games, you say "I'm the trustee" and boom, they drop the act. The relationship is different: it's just a business transaction.
Of course, the trust can cut off her credit and give her an allowance, arresting the behavior hard and fast. She would not like that, but the balancing force of reason may be exactly what she needs.
Basically, the trust lets you tag-team the creditors.
No bankruptcy. Period. Unless...
Bankruptcy is the conventional advice, but then, so is "Do the Dew". Really. Bankruptcy gets talked up by bankruptcy lawyers, who get $2500ish every time someone files. It can be useful in some cases where assets are involved (legal work in those cases costs more than $2500). If it's all unsecured consumer debt, bankruptcy is fast-forwarding to the worst possible outcome.
The upside of bankruptcy is the creditor calls and mails will stop. But as Doc Martin's aunt said in the first episode of that fine show, "Are you a man or a mouse?" And there are other ways to get that anyway.
Whereas, here's the damage. You have to volunteer (!) a list of attachable assets (instead of them having to hunt them down at their own expense), and you have to consent to all of them being liquidated to pay creditors. Hiding any is a crime. A trustee (sound familiar?) gets appointed to liquidate those assets, but he's not your buddy this time, he's a court appointed stranger and you have to pay his wage. At lawyer rates. WTH.
In fact, you pay for all the lawyers. You lose the most, keep the least and pay the lawyers too. And get a huge 10-year burn on your credit report. No wonder everyone wants you to do it!
So when you're ready for bankruptcy on unsecured consumer debt only, here's what you do instead.
Just stop paying them. Seriously. At this point, two clocks start ticking.
Yes, they will hew and moan, many calls, many letters. This is cheap posturing and can all be ignored. We talked about how to deflect those so they needn't be a nuisance.
Behind the scenes, the bank is hunting her assets. But they're doing a cursory search of things they can do automatically e.g. Via public records, they are looking to spend $10 on the question "are you worth suing". And you need to know that answer so you know if they're coming.
Even then, they may not be coming. They would first have to sue you, deal with your defense, win, return to court to attach or garnish assets, which could cost them $5000 or more in literally good money thrown after bad -- all the while praying you don't declare bankruptcy which would make all the effort wasted. In fact, the fact that you haven't declared bankruptcy may stay their hand, thinking you do intend to pay back or otherwise have them beat. As such, suing is something creditors do reluctantly unless they see a definite "brass ring" of attachable assets, which even so they may need to divvy up among other creditors. It's a big risk.
As I implied, bankruptcy is your ultimate nuclear weapon: mutual assured destruction. They don't get paid and your financial life is wrecked. Save it until they've already won the lawsuit and are about to take assets in a way that would be worse than bankruptcy!
You always have the option, at all times, even on the way out of the courtroom after having lost, to settle the debt for a fraction. Be sure to be super insulting with your offers, it is amazing what they'll settle for. They will ultimately sell your old debt to a collector for 5 cents on the dollar, so 20% may be accepted.
More likely than not, they will toss empty threats until the first clock has run down: that's your State's statute of limitations. The debt is now too old to sue for. It is time-barred. You are free of it. Unless you are super stupid: It is possible to restart that clock; don't.
The second clock applies to your credit report. 7 years (not 10) later, the bad debt is gone from your credit.
"But isn't 'just not paying them' unethical somehow because you are using tricks of the law to not pay?" That is exactly what bankruptcy is. They have equal ethical standing: either both are right, or neither. If you don't believe in them, don't do them. And you can use the trustee method, just tell the trustee you pay your debts. I very strongly endorse hunkering down, eating ramen, getting a job, and paying it all. There is nothing wrong, however, with mercilessly haggling them down on fees, interest and other blatant usury.