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Section 247 of Insolvency Act CAP 53: Preferential debts: priority of debts

    

(1) For the purpose of this Act, a bankrupt's preferential debts are those specified in paragraphs 2 to 4 of the Second Schedule and are payable as provided by that Schedule in priority to the bankrupt's other debts.
(2) Debts of the bankrupt that are neither preferential debts nor debts to which section 248 applies also rank equally between themselves and, after the preferential debts, are payable in full unless the bankrupt's estate is insufficient to satisfy them, in which case they abate in equal proportions among themselves.
(3) Any surplus remaining after the payment of the debts referred to in subsection (2) is to be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the commencement of the bankruptcy.
(4) Interest on preferential debts ranks equally with interest on debts that are not preferential debts.
(5) The rate of interest payable under subsection (4) in respect of a debt is the rate for the time being prescribed by the insolvency regulations for the purposes of this section.
(6) Neither this section nor section 248 limits the effect of a provision of any written law under which the payment of any debt or the making of any other payment is, in the event of bankruptcy, given a particular priority or required to be postponed.
(7) If, before the commencement of the bankruptcy, a creditor agrees to accept a lower priority in respect of a debt than it would otherwise have under this section, nothing in this section or the Second Schedule prevents the agreement from having effect according to its terms.

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