| Commentary

250 Ordinary preferential debts

| Commentary

250 Ordinary preferential debts

Preferential debts, which rank equally among themselves, must be paid in full before any dividend is paid to ordinary creditors1. The abolition of ‘crown preference’ in 2004 greatly altered their impact. The remaining categories of preferential debts are specified by the Insolvency Act 19862 and are, in summary, as follows:

  1. 250.1

        category 4: certain contributions to occupational pension schemes;

  2. 250.2

        category 5: employees’ remuneration for the period of four months before the bankruptcy up to a maximum of £8003;

  3. 250.3

        category 6: levies of the

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