What I want to do is to fully encrypt my external HDD. My only system ATM is on Debian testing so I need to be able to set up the encryption from Linux. My questions are, can that be done from Linux? If I need to transfer the files to a friend, can I just plug in the USB, input the password and will his windows PC be able to read the encrypted filesystem?
Linux doesn't support NTFS file-level encryption. Bitlocker using the recovery key sorta works but is still very new(look here for more info). Windows in turn can't read LUKS-encrypted devices. If you need to share your encrypted drive between Windows and Linux, I'd recommend VeraCrypt or one of the other TrueCrypt forks.