Manage Financial Data: Liabilities Card

Learn how to efficiently manage and edit a client’s liability data

Liabilities can be categorized by type and integrated into different payment strategies.

The available types of existing liabilities are:

Personal loan
Credit card
Mortgage
Line of credit
Business loan

The available types of future liabilities are:

Future personal loan
Future mortgage
Future business loan
Future line of credit

Accessing the Liabilities Card

To access the Liabilities Card, navigate to the client’s Current Data page and locate the Financial Data section. This is where you can view, manage, and update all liability details for the client.

Liabilities Card Properties

To add a new Liability, simply click the "+ Liability" button in the bottom left of the card.

To the right of each Liability is a More Data icon that allows you to specify more details about the Liability.

You can rename all liabilities in the Description field. The owner is set to Joint by default when the plan contains a Client and a Co-client.

Enter the Balance owing and enter the correct date in the Balance as of date in order for accurate calculations of the timeframe left to pay the liability, as well as the total potential interest that is to be paid throughout the duration of the liability payments.
These calculations are important factors to take into consideration when proposing strategies on the Planning page.

The interest rate is always assumed to be a nominal annual percentage. Payments and compound frequency are directly linked to one another in every type of liability setup except for mortgages. Mortgages are compounded semi-annually by default and you are given the option to change it using the Compound frequency drop-down.

You are expected to enter the pre-calculated amount for the payment and specify under Payment type whether it represents Interest only or Principal and interest. By default, all payments on liabilities are assumed to be Interest only except for mortgages.
Personal loans, Credit cards, and Lines of credit have a Credit limit field in addition to the fields mentioned above.
The Line of credit can be used to cover deficits in the event that they occur during cash flow analysis.
All liabilities, with the exception of credit cards, have the added option to be linked to an existing asset. For this reason, you should always enter assets prior to entering liabilities when you set up a new client.
Liability interest payments can be set to be tax-deductible. In order to turn on this option, toggle the option Tax deductible at the bottom right side of the window from No to Yes.
You can also add future liabilities: future personal loans, future mortgages, future business loans and future lines of credit.

You can delete a liability by clicking the Trash can icon to the left of the liability.

Payment Types

Interest Only: The borrower pays only the interest for a set period, leaving the principal untouched. Monthly payments are smaller initially but do not reduce the loan balance.
Principal and Interest: Payments cover both the interest and part of the principal, gradually reducing the loan balance until fully repaid.
Capitalized Interest: Unpaid interest is added to the loan's principal, increasing the total balance and potentially raising the overall cost of the loan.