Moneys or funds collected for the holders of defaulted bonds or notes entitled to share equally and ratably therein shall, after the payment of costs and fees as provided in section 8265 (relating to costs of suits or proceedings), be applied by the trustee or receiver, unless the terms of the bonds or notes provide otherwise, as follows:

(1) Unless the principal of all of the bonds or notes represented has become or has been declared due and payable:

(i) To the payment to the persons entitled thereto of all installments of interest then due in the order of the stated maturity dates of the installments of the interest and, if the amount available is not sufficient to pay any installment in full, then to the payment ratably, according to the amounts due on the installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest expressed in the bonds or notes or coupons for interest.

(ii) To the payment to the persons entitled thereto of the unpaid principal of any bonds or notes which has become due, whether at stated maturity dates or by call for redemption, in the order of their respective due dates and, if the amount available is not sufficient to pay in full all the bonds or notes due on any date, then to the payment ratably, according to the amounts of principal due on the dates, to the persons entitled thereto without any discrimination or preference.

(2) If the principal of all of the bonds or notes entitled to share equally in the moneys has become or has been declared due and payable, to the payment of the principal and interest then due and unpaid upon the bonds or notes without preference or priority of principal over interest or interest over principal, or of any installment of interest over any other installment of interest, or of any bond or note over any other bond or note, ratably according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the bonds, notes and coupons.

(3) If more than one series is involved and the principal of all bonds or notes of one or more series has become or has been declared due and payable, and that if one or more others has not, the funds available shall be apportioned to each series according to the respective amounts of principal of each series then outstanding less, as to each series, any amounts held earmarked for the series, and distribution to the holders of the bonds, notes and coupons of each series shall be made according to whichever of paragraphs (1) and (2) may be applicable.