diff --git a/src/basic/engine/varstr_garbage_collect.s b/src/basic/engine/varstr_garbage_collect.s
index 1285b288..13520446 100644
--- a/src/basic/engine/varstr_garbage_collect.s
+++ b/src/basic/engine/varstr_garbage_collect.s
@@ -16,6 +16,13 @@ varstr_garbage_collect:
 	lda TXTPTR+1
 	pha
 
+	// Similarly, we will reuse OLDTXT as the pointer to string descriptor
+
+	lda OLDTXT+0
+	pha
+	lda OLDTXT+1
+	pha	
+
 	// INDEX+0 and INDEX+1 will be our cumulative shift counter
 
 	lda #$00
@@ -31,7 +38,8 @@ varstr_garbage_collect:
 
 varstr_garbage_collect_loop:
 
-	// Check whether we reached FRETOP
+	// Check if this was the last string
+	// XXX instead check if FRETOP+INDEX == TXTPTR
 
 	lda TXTPTR+0
 	cmp FRETOP+0
@@ -46,8 +54,12 @@ varstr_garbage_collect_loop:
 
 varstr_garbage_collect_end:
 
-	// Restore TXTPTR and quit
+	// Restore OLDTXT and TXTPTR, and quit
 
+	pla
+	sta OLDTXT+1
+	pla
+	sta OLDTXT+0
 	pla
 	sta TXTPTR+1
 	pla
@@ -60,15 +72,11 @@ varstr_garbage_collect_check_bptr:
 	// Decrement TXTPTR by 2, so that it points to the back-pointer
 
 #if !HAS_OPCODES_65CE02
-
 	lda #$02
 	jsr varstr_TXTPTR_down_A
-
 #else // HAS_OPCODES_65CE02
-
 	dew TXTPTR
 	dew TXTPTR
-
 #endif
 
 	// Check whether the back-pointer is NULL
@@ -78,39 +86,87 @@ varstr_garbage_collect_check_bptr:
 #if CONFIG_MEMORY_MODEL_60K
 	ldx #<TXTPTR
 	jsr peek_under_roms
-	sta DSCPNT+2
+	sta OLDTXT+0
 	iny
 	jsr peek_under_roms
-	ora DSCPNT+2 
+	sta OLDTXT+1
 #elif CONFIG_MEMORY_MODEL_46K || CONFIG_MEMORY_MODEL_50K
 	// XXX consider optimized version without multiple JSRs
 	jsr peek_under_roms_via_TXTPTR
-	sta DSCPNT+2
+	sta OLDTXT+0
 	iny
 	jsr peek_under_roms_via_TXTPTR
-	ora DSCPNT+2 
+	sta OLDTXT+1
 #else // CONFIG_MEMORY_MODEL_38K
 	lda (TXTPTR),y
+	sta OLDTXT+0
 	iny
-	ora (TXTPTR),y 
+	lda (TXTPTR),y
+	sta OLDTXT+1
 #endif
 
+	ora OLDTXT+0
 	beq varstr_garbage_collect_unused 
 	
 	// The back-pointer is not NULL - string is used
+	// Increase the string descriptor pointer by INDEX
 
 	// XXX implement this
 
+	// Move string memory up by INDEX
+
+	// XXX
+
+	// Update TXTPTR
+
+	// XXX
+
+	// Next iteration
+
+#if HAS_OPCODES_65C02
+	bra varstr_garbage_collect_loop
+#else
+	jmp varstr_garbage_collect_loop
+#endif
+
 varstr_garbage_collect_unused:
 
-	// The back-pointer is NULL - string is unused
+	// The back-pointer is NULL - string is a garbage to collect
+	// Fetch the string length
 
-	// XXX implement this
+#if !HAS_OPCODES_65CE02
+	lda #$01
+	jsr varstr_TXTPTR_down_A
+#else // HAS_OPCODES_65CE02
+	dew TXTPTR
+#endif
+
+	ldy #$00
+	lda (TXTPTR), y
+
+	// Decrement string length by 1, it will be easier to perform calculations
+
+	tax
+	dex
+
+	// Increase INDEX (shift offset) by string length + back-pointer length
+
+	lda #$03
+	jsr varstr_INDEX_up_A
+	txa
+	jsr varstr_INDEX_up_A
+
+	// Decrease TXTPTR by unused string length-1
+
+	tax
+	jsr varstr_TXTPTR_down_A
+
+	// Next iteration
 
 #if HAS_OPCODES_65C02
-	bra varstr_garbage_collect_end
+	bra varstr_garbage_collect_loop
 #else
-	jmp varstr_garbage_collect_end
+	jmp varstr_garbage_collect_loop
 #endif
 
 
@@ -118,9 +174,9 @@ varstr_garbage_collect_unused:
 
 
 
-	// XXX move this routine to a separate file
+	// XXX move these routines to separate files
 
-varstr_TXTPTR_down_A:                  // .A - bytes to lower TXTPTR, uses DSCPNT+2
+varstr_TXTPTR_down_A:                  // .A - bytes to decrease TXTPTR, uses DSCPNT+2
 
 	sta DSCPNT+2 
 
@@ -132,3 +188,17 @@ varstr_TXTPTR_down_A:                  // .A - bytes to lower TXTPTR, uses DSCPN
 	dec TXTPTR+1
 !:
 	rts
+
+
+varstr_INDEX_up_A:                     // .A - bytes to increase TXTPTR, uses DSCPNT+2
+
+	sta DSCPNT+2 
+
+	clc
+	lda INDEX+0
+	adc DSCPNT+2 
+	sta INDEX+0
+	bcc !+
+	dec INDEX+1
+!:
+	rts