When distributing zakat, which is better: to pay off the debt of one debtor completely, or to distribute it among four debtors by paying off a portion of each of their debts?

It is better to equalize between creditors when settling their debts from Zakat if they are equal in need. If they differ in need, it is better to give a larger amount to the most impoverished. Equalizing between individuals of the same category is not obligatory, but it is preferable to differentiate between them according to need.