I would strongly advise that you fight against becoming bankrupt because you would be simply cast to the financial unknown for the next 10 years. 6 years for the bankruptcy and 4 to rebuild your credit reference.
Its not worth getting it done over �5000 thats for sure, and i would also try your best to agree with the company to defer or even freeze the interest until you start working again.
An IVa isnt any better because your debt gets handed over to a trustee (accountant) and your legally bound to adhere to their terms and you must pay a contribution to the trustee, however if you are on benefits they dont ask for it.
At the end of the IVA you become bankrupt anyway, and before people start slating my advice, STOP because for the last 5 years i have been going through this exact process for �19,000 and i really wish i'd have just paid it all like i can now.
Anyway, fight it now and be happy later.
Good Luck