The whole economy – and everyone in it – is imperilled by this debt, but at the sharp end is a trail of individual misery. There’s nowhere better to observe the human fallout than in the bankruptcy court, a modern block tucked away behind the gothic splendour of the high court in the Strand. Every day, in quiet rooms, judges rattle through lengthening lists of debt disasters.
Few debtors turn up, no doubt devoid of hope. The main creditor is the state, HM Revenue & Customs seeking unpaid VAT and income tax, or councils chasing council tax. The state has first call.
Part 6 Final Distribution and application of assets in bankruptcy cases
36A.106 Abolition of crown preference and remaining preferential creditors
The implementation of the EA2002 reduced the creditors who were previously entitled to preferential ordinary unsecured status. The majority of unsecured creditors (including HM Revenue and Customs(HMRC), see paragraph 36A.107 and 36A.61) now rank equally as non-preferential ordinary unsecured creditors where the petition was presented on or after 15 September 2003.
Have I got this right? Govt is an ordinary unsecured creditor?