Here’s How You Can Get Cash from the Government If You’ve Been Declared Bankrupt
In the new government aid package PEMERKASA announced in March 2021, the government announced a surprise for people declared bankrupt – If you are bankrupt, you can open a bank account online to get government cash aid.
If you’re in the B40 category and you lost your income, you can get RM500 from the government. If you’re a Bantuan Prihatin Rakyat (BPR) recipient and you earn RM1,000 and below, you can also get an extra RM500.
The announcement is important because usually, if you were declared bankrupt, you wouldn’t be able to open a new bank account unless you got permission from the Malaysian Department of Insolvency (MDI), which could be difficult to get. You also weren’t allowed to open a bank account online. And, you wouldn’t be able to use your existing bank accounts because your money will be managed by the MDI to cover your monthly debt repayments.
Click here to understand more about bankruptcy.
So, how can you get cash if you’ve been declared bankrupt?
- You’ll still need permission from the MDI to open a bank account, but you can now just email the branch in charge of your case.
- Once the MDI gives you permission, they will give you a letter of approval to show to your bank. You can then open a bank account; in person or online, making it easier for you to open a new bank account.
- You can then use the bank account to receive government aid. Previously, your bank accounts could only be used for debt repayment.
- For further information about the PEMERKASA package and how to get aid, you can check here.
- Any cash assistance sent into your account will not be deducted to pay off your monthly debt installments.
What does this mean for your money?
Previously, people who were declared bankrupt were also eligible for government cash assistance. But since they couldn’t use their existing bank accounts, they’d have to go to a Bank Simpanan Nasional branch to get the aid in cash – This is how Malaysians who are eligible for government aid but don’t have bank accounts usually get the aid.
So, the new announcement from PEMERKASA will make it easier for those declared bankrupt to get government assistance.
Since the government aid won’t be used to repay your debts, you’d also be able to have a bit more cash in your hands. You can read our guide on planning and budgeting or use our monthly budget calculator to help you manage your money.
But remember, if you can afford to, pay off as much of your debt as quickly as possible to help you to get out of bankruptcy. Read our guide on how to manage your budget or use our credit card repayment, personal loan, housing loan and vehicle loan calculators to find out how much you need to repay each month.
How can you contact the MDI?
If you’ve been made bankrupt, you’ll need to contact the MDI branch in the state where you were made bankrupt. You can find your nearest MDI branch here.
For further information, you can also call MDI’s headquarters at 03-8885 1000.