People in debt would be better off arranging an individual voluntary agreement (IVA) rather than declaring bankruptcy, an industry insider has stated.

The claim was made by Anna Sofat, the founder of the financial planning service ADDIDI Wealth, who says that with an IVA, the person in debt still has some control over proceedings.

She did however urge caution when considering an agreement as it will affect a person's credit history.

"It is a better option than declaring yourself bankrupt, because you retain an element of control. Some of the debt is written off, and some of it you agree to repay," Ms Sofat said.

Her advice was for individuals to seek financial advice from professionals to see what the best path to take is.