No. of Recommendations: 8
sprexumn - I'm sorry this situation hasn't resolved itself yet.

Many of my favorite Fools have already given sound advice, and I can only second it (or third, or...).

Certainly there is quite a bit of risk in paying off her current debt, and then leaving her to her own devices. Likely, with a credit score than is even further in ruin than before, she will receive only the worst credit offers. Given her apparent lack of understanding how credit works, this will only end up costing even more than the current debt (higher rates, yearly fees, etc).

So, I say if you are gung-ho about paying off the debt, she has to agree that you custodian her spending - every penny. If you are comfortable taking on this added stress, then perhaps this is the best solution for you. Keep in mind that an ounce of prevention is worth a pound of cure (or $117k worth in her case). She still needs to be taught how money works. If my musician wife can learn the concepts, anyone can - they just need to have the desire to.

However, if you aren't comfortable handling her every day finances, nor is she willing to hand them over, I'd say forget about helping her out any more. It's going to be extremely difficult to let go, and you may have a few sleepless nights, but at the end of the day it isn't, and can no longer be your problem. You've done all you can and then some already...

And for what it's worth, I was once in your sister's shoes. I got a loan from my parents to pay off debt, only to rack it up again. It took me until I had nobody to turn to but myself to realize just how dumb a game I was playing. Lucky for me I've never missed a payment, have good income and credit score, was able to change my focus and spending habits, and will be debt-free March 2007.

Best of luck,

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