Choosing to file for bankruptcy or an individual voluntary arrangement (IVA) ahead of taking out a debt consolidation loan could have long-term implications for borrowers, it has been suggested.

Consumer affairs manager for Experian, James Jones, reported that insolvency is often not the best route for consumers.

He reported that although it can be the right choice for some, Britons should not view insolvency as an "easy way out of debt" and as a result consumers could be advised to look to a consolidation loan as an alternative option.

Mr Jones added that filing for an IVA or bankruptcy could affect consumers’ ability to get a job or housing in addition to getting a personal loan in the future.

According to research by financial charity Credit Action some 300 people across the country become insolvent every day.

Over the last three months of 2006 a total of 29,804 consumers declared bankruptcy or took out an IVA.

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