How exactly could you protect your debt, by enclosing it in larger debts with better security?
(Please note that is guesswork based on the linked text.)
From the Inky Fool page:

Then, in the early seventeenth century John Donne promised a chap called Sir Henry Goodere that he would send him a letter in verse. He didn't get round to it, and to make matters worse Goodere wrote him one, which meant that Donne really owed him. Or, as Donne put it in an apologetic letter:

I owed you a Letter in verse before by mine own promise, and now that you think that you have hedged in that debt by a greater by your Letter in verse, I think it now most seasonable and fashionable for me to break.


John Donne already owed him a letter, then that obligation for a letter got rolled into a larger obligation.
This is obviously a non-financial obligation. To what extent we can extend this to finance, an existing debt is rolled into a larger new loan, with the new loan having better collateral than the old. In a modern context, it would be something like rolling a credit card debt into a home equity line.
(The only other interpretation I can think of - which does not fit this example - would be to reduce risk in a book of loans by diversification. I.e., replace riskier loans with ones secured by stronger collateral. This would not be considered “hedging” by modern portfolio managers, but it might match a loose interpretation of “hedge your bets.”)