*Are credit card debts considered part of the liabilities? Or are liabilities personal loans?
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if the cards are paid on time and does not hamper credit score, it is not required to be mentioned! ;DPersonal/housing/Vehicle/renovation/education etc. are liabilities!
Should my liabilities be included as spouse of principal applicant?
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Since the settlement fund increases for a couple than single applicant, so the liability part is taken care of and spouse shall not be considered liability! 
What are fixed deposits? Are salaries considered fixed deposits?
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The fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account.\
salaries can LEAD to fixed deposits but not vice versa.
*Are short term loans (loans that are going to be finalized mid next year considered liabilities?
*Should those loans reflect what he still have pending to pay or the total amount the bank gave has on the loan?
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Loans principle remaining amounts considered liabilities, it should reflect!
*Should we write a cover explaining that those liabilities are until mid next year and what they are? and explain that the POF are not going to be used for payment of those liabilities?
:- you shall provide loan statement with payment scheduled from bank on its stationary, cover letter may be helpful!
I tried to answer with best of my knowledge... but much more experienced members shall help you more, hope it helps ;D ;D
