Insolvency practitioners are increasingly likely to offer individual voluntary arrangements (IVAs) as a debt management solution, it is claimed.

Before deciding on this as a means of managing cashflow problems, people should first seek advice from a debt management agency, Bob Kingdon from debt collection agency 1st Credit, told the Daily Telegraph.

Catherine Torazzo, from Citizens Advice, also told the paper: "Insolvency procedures, including IVAs and bankruptcy, are not easy options, but they can be useful as a last resort for people who have no prospect of ever repaying their debts."

An IVA is a legally-binding document which exists between debtors and creditors, giving people the opportunity to make reduced payments towards the total amount of the debt.

A percentage of the total amount is usually paid off, with debts usually settled within around five years.

It is often seen as an alternative to bankruptcy, which involves filling in forms at a county court and the debtors assets assessed before being distributed accordingly to creditors.