Bounce yourself behind bars.

Provided by 7DAYS.ae

Dear Graham, I'm new to the region and I have heard an urban legend that if you bounce a cheque here, you can go to jail. Surely this can't be true ;It certainly is true and this topic keeps raising its head. When you write and sign a cheque, you are promising to make a payment. If you have insufficient funds in your account and the cheque bounces, the authorities view this as a deliberate attempt to not make the payment and it is regarded as theft and therefore a criminal offence.

If reported to the police, it is normal practice that you will be arrested. If prosecuted, this normally leads to a jail sentence.

Banks will typically ask for a signed blank cheque to be held as security against credit cards and some loans. If they decide that they want their money back that you owe them, they can present the blank cheque. If it bounces, you can be prosecuted.

Serving a jail sentence does not Cywrite offCO the debt either. Banks can put a civil case against you to get their money back after you've been to prison and this could land you back in jail again.

Banks are not unreasonable and they will listen to you, if you get in front of the right person. A good tip is if you are changing employers and you have bank debt, inform your bank and get a salary certificate from the new employer to the bank as quickly as possible. The bank should then not be concerned that you are going to 'do a runner' and subsequently not try to cash the blank

cheque.

Last week you mentioned about keeping up some form of retirement savings when we move overseas. I am intending to stay here for up to five years and I want to enjoy myself. Surely missing just five years of pension savings is not going to make that much difference when I retire ;

You've not told us how old you are or when you intend to retire but here is an example. A 35 year old saving just $5,000 per year will typically have $230,000 more in savings than someone starting to save the same amount at age 40. So, the 40 year old will have saved $25,000 in contributions but will lose almost ten times this amount when they retire. If you are younger then the effect will be worse. Do you think that the memories are worth the potentially miserable retirement ;

After the recent birth of our first grandchild, we are considering having some form of savings for him. I recall as a child that my parents did the same for me. Are these plans still available ;

They are. The old concept of a child savings plan was that the plan was in the childCOs name, money was contributed to it and when the child reached a certain age, the plan cashed in and the money was paid to the child directly. Some parents felt that they needed more control of what happens to the money when the plan matures as they couldn't predict what the child would do with the money. The solution was simple.

Take out the savings plan in the name of the person making the contributions but nominate the child as the beneficiary should the contributor die. At maturity, the plan holder could decide if the child was responsible enough to do something sensible with the money.

These plans are also popular for saving towards paying for further education. It is well known that university graduates generally earn more money than high school graduates. Starting a savings plan with a humble amount for an infant to allow them to go to university is going to give them a terrific start in adult life.

The beauty is, you can change your mind with what to do with the money if they decide they don't want to go onto further education.

Graham Wolverson is an independent financial advisor with JdV International Insurance Brokers LLC.

Email him at: graham.wolverson@7days.ae

A[umlaut] 2007 Al Sidra Media LLC

Provided by Syndigate.info an Albawaba.com company