Plaster walls, especially those in older homes, usually have cracks due to the house "settling" in its foundation, or holes from where furniture or doors have struck the plaster and damaged it. Repairing plaster walls is a fairly straightforward process. While it should be done right before a paint job (as the location of the repair will be visible), you may choose to repair the damage and match the patch as best as you can to the existing wall surface. 
To repair a plaster wall, you will need:
•Patching plaster (sold in powder form - follow instructions on package to prepare it for use)
•Joint compound
•Curved tool for undercutting (such as a simple can opener)
•Spackling tool or putty knife
•Plaster trowel and length of wood (for corner repairs)
Hairline Cracks in Plaster Walls
Hairline cracks in plaster walls cannot be patched until there is something for the patch to adhere to. In order to provide a good seat for the patch, the hairline crack should be widened a bit. For long hairline cracks, remove a bit of plaster at intervals along the crack to provide a better seat. Clean out any dust or loose plaster with a damp towel.
Fill the crack with plaster using your spackling knife. As you do so, be sure to get into the gouges that you have made along the crack and overlap the existing plaster. This will allow the patch to cling to the vertical surface of the wall, ensuring a secure patch.
Allow the patch to dry for 24 hours. If your patch seems to have receded into the crack, patch it again and allow to dry for another 24 hours. If you notice an uneven surface, sand the patch smooth to match the rest of the wall. Prime and paint if necessary.
Repairing Holes in Plaster Walls
Clear away any dust or loose plaster around the hole that will prevent the patch from adhering to the wall. Carefully carve under the edge of the broken plaster, in order to provide a good seat for the plaster patch. In other words, try to make enough space for the plaster patch to slightly ooze underneath the existing layer of plaster. It's possible to do this with a curved metal tool, such as a can opener, as long as you can get underneath the existing plaster without unnecessarily breaking out more.
Dampen the edge of the hole and fill with patching plaster using a spackling tool. Make sure the patching plaster does not fill the hole level with the existing wall. It should fill the hole to a level just below the surface of the existing plaster - you want to leave enough space for the joint compound to cover the plaster patch and still be even with the wall's surface. Score the surface of the plaster patch with your spackling tool with vertical and horizontal lines, then allow to dry for 24 hours.
The next day, apply joint compound to the surface of the patch, spreading it just over the edges of the wall. When this has dried, apply another coat of joint compound, if necessary, to make the patch even with the existing wall. Sand even with the wall, and prime and paint if desired.
Repairing Outside Corners of Plaster Walls
Measure the vertical length of the damaged area. Use a length of wood that exceeds this vertical dimension, and tack it gently to the wall - flush with one of the corners - making sure that the length of the wood extends past the hole on both the top and the bottom. This will be your guide when you patch the outside corner so that you can get an edge that blends in with the undamaged portion of the corner. In other words, this piece of wood will act as an extension of the wall, giving you a surface that is much like the one you would have if you were repairing plaster damage on a flat wall.
Remove loose plaster, and undercut the hole to provide a good seat for the plaster patch. Use a plaster trowel to smooth in patching plaster away from the wooden guide, overlapping the existing wall slightly. After one side has dried, you may switch the position of the wooden guide to the other side of the damaged corner and repeat the process.
Once the patch has dried completely, sand smooth. In addition, fill any holes used to tack up the piece of wood with joint compound.
At first, repairing plaster damage seems like a daunting task. But take your time to patch plaster properly, and you will get solid, long-lasting results.
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