Order of payments

Order of payments

It is a function of the office-holder, whether in personal or corporate insolvency, to collect in the assets belonging to a company or individual and to apply these for the benefit of the company's or individual's creditors in accordance with the statutory order of priority.

For reading on the order of payments, see Practice Notes:

•
Waterfall of payments—a comparative guide
•
Waterfall of payments in administration
•
Waterfall of payments in liquidation
•
Waterfall of payments in administrative receivership
•
Waterfall of payments in bankruptcy

The prescribed part

The prescribed part was introduced by the Enterprise Act 2002 as part of a package of major reforms to the corporate insolvency regime. It created a new section 176A of the Insolvency Act 1986 (IA 1986).

IA 1986, s 176A applies where a company has granted a floating charge on or after 15 September 2003 and gone into one of the following insolvency procedures:

•
liquidation
•
administration
•
provisional liquidation
•
receivership

In these insolvency procedures, the office-holder is required to set aside a portion (a ‘prescribed part’) of the company’s

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