EXHIBIT 10.1


                              EMPLOYMENT AGREEMENT


      AGREEMENT made as of the 12th day of September,  2002 by and between DELTA
FINANCIAL CORPORATION, a Delaware corporation (the "Corporation"), and Sidney A.
Miller (the "Executive").
                              W I T N E S S E T H:
      In  consideration   of  the  representations,  warranties  and  conditions
contained herein, the parties hereto agree as follows:

            1.   POSITION AND RESPONSIBILITIES
                 -----------------------------

            1.1. The Executive shall serve in an executive  capacity as Chairman
of the Board of the Corporation.  The Executive shall perform such functions and
undertake  such  responsibilities  as  are  customarily   associated  with  such
capacity. The Executive shall hold such directorships and executive officerships
in the  Corporation  and any  subsidiary to which,  from time to time, he may be
elected or appointed during the term of this Agreement.

            1.2. The  Executive  shall devote his full  time and best efforts to
the  business  and  affairs  of the  Corporation  and to  the  promotion  of its
interests.

            1.3. The principal  executive  offices  of  the Corporation shall be
maintained in Long Island,  New York and the Executive  shall not be required to
relocate outside of Long Island, New York without his consent.

            2.    TERM OF EMPLOYMENT
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            2.1. The term of employment  shall be three years,  commencing  with
the date hereof,  unless sooner  terminated as provided in this  Agreement.  The
initial term of employment  and any extension  thereof is herein  referred to as
the "Term."

            2.2.  Notwithstanding  the  provisions  of Section 2.1  hereof,  the
Corporation  shall  have the  right,  on  written  notice to the  Executive,  to
terminate the Executive's  employment for

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Reasonable  Cause,  such  termination  to be  effective  as of the date on which
notice is given or as of such later date otherwise specified in the notice.

            2.3. For purposes of this  Agreement,  the term  "Reasonable  Cause"
shall mean any of the following actions by the Executive:  (a) failure to comply
with any of the  material  terms of this  Agreement,  which  shall  not be cured
within 30 days after the Executive's receipt of written notice from the Board of
Directors; (b) engagement in gross misconduct injurious to the Corporation or an
affiliate of the Corporation,  which shall not be cured within 30 days after the
Executive's  receipt of written notice from the Board of Directors;  (c) knowing
and  willful  neglect  or refusal to attend to the  material  duties  reasonably
assigned to him by the Board of  Directors,  which shall not be cured  within 30
days  after  the  Executive's  receipt  of  written  notice  from  the  Board of
Directors; (d) intentional misappropriation of property of the Corporation or an
affiliate of the  Corporation to the  Executive's own use; (e) the commission by
the Executive of an act of embezzlement; (f) Executive's conviction for a felony
or if criminal  penalties  are imposed on Executive  relating to any  individual
income  taxes due and owing by  Executive;  or (g)  Executive's  engaging in any
activity  which  would  constitute  a material  conflict  of  interest  with the
Corporation  which  shall  not be cured  within 30 days  after  the  Executive's
receipt  of  written  notice  from the  Board of  Directors.  If the  provisions
contained in  subsections  (a),  (b), (c) or (g) above cannot be cured within 30
days due to the nature of the breach, the cure period shall then be extended for
a reasonable period of time;  provided,  however,  the Executive  undertakes and
continues in good faith to cure the same.

            2.4. If the Executive's  employment  with the  Corporation  shall be
terminated  (a) by the  Corporation  other than pursuant to Sections 2.2, 4.1 or
4.2 hereof or (b) by the Executive for Good Reason (as defined herein), then the
Corporation  shall pay to the  Executive  as  severance  an amount  equal to the
product of (1) the lesser of (A) the remaining Term in years plus 1,  multiplied
by 100% or (B) 299%,  multiplied  by (2) the last  five  years'  average  annual
compensation  as  calculated  in  accordance  with  Section 280G of the Internal
Revenue Code of

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1986, as amended (the "Code").  All such payments  shall be made within  fifteen
days of such  termination.  In addition,  for the balance of the Term  following
such  termination  (or for a period of one year following such  termination,  if
greater),  the Corporation  shall provide the Executive all benefits  (including
medical  coverage)  which  may be in effect  at such  time  which are  generally
available to other senior  executives of the  Corporation  or its  subsidiaries;
provided, however that the Executive shall only be entitled to such payments and
benefits as long as he is in compliance  with the provisions of Section 5 below,
to the extent applicable.  Health benefits otherwise receivable by the Executive
pursuant to this Section 2.4shall be reduced to the extent  comparable  benefits
are  actually  available to the  Executive  during such period from a subsequent
Employer.  The Executive  shall have the right for a period of 30 days after the
occurrence of a Good Reason event to terminate this Agreement for Good Reason.

            2.5 For purposes of this  Section,  "Good  Reason" shall mean any of
the following, which occurs subsequent to the date of this Agreement:

            (i) a reduction by the Corporation of the Executive's base salary as
then in effect, without the Executive's written consent;

            (ii) a relocation  or an actual change in the  Executive's  place of
employment outside of Long Island, New York without Executive's prior consent;

            (iii) prior to a Change in Control,  failure of the  Corporation  to
continue to maintain the same medical  benefit  plans  covering the Executive as
are made available to other senior executives of the Corporation;

            (iv) any material breach by the Corporation of any provision of this
Agreement  which shall not be cured within 30 days after the Board of Directors'
receipt of written notice from the Executive;

            (v) any failure by the  Corporation to obtain the assumption of this
Agreement by any successor  entity.

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            3. COMPENSATION
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            3.1.(a)  The   Corporation   shall   pay  or   cause  Delta  Funding
Corporation  to pay to the  Executive  for the  services  to be  rendered by the
Executive hereunder a salary at the rate of $250,000 per annum. The salary shall
be payable in equal  installments  in accordance with the  Corporation's  normal
payroll practices.

                (b)  In  addition,  at  the   discretion  of   the  Compensation
Committee  of the  Board of  Directors  (the  "Compensation  Committee"),  after
consideration of the Corporation's  actual performance relative to its financial
and operational objectives for any particular period, and the performance of the
Executive,  as well as such other factors deemed appropriate by the Compensation
Committee  in its  discretion,  the  Corporation  may also pay the  Executive an
annual bonus with respect to each fiscal year of the Corporation. Such Bonus, if
any,  may be paid in cash,  in shares of Delta  Financial  Corporation's  Common
Stock,  par value $.01 per share (the "Common  Stock") or in any  combination of
cash and  shares  of  Common  Stock,  as  determined  in the  discretion  of the
Compensation  Committee.  Nothing herein contained shall, however,  obligate the
Corporation to pay any annual bonus to the Executive,  it being  understood that
any such bonus shall be in the sole discretion of the Compensation Committee and
that the amount thereof,  if any, may vary depending upon actual  performance of
the Corporation and the Executive as determined in the discretion of the Board.

            3.2. The Executive  shall be entitled to participate in, and receive
benefits from, any insurance, medical, disability, bonus, incentive compensation
(including  grants of non-  qualified  stock  options under any of Delta's Stock
Option Plans, as determined by the  Corporation) or other employee benefit plan,
if any are adopted,  of the Corporation or any subsidiary which may be in effect
at any time during the course of his  employment  by the  Corporation  and which
shall be generally available to the Executive on terms no less favorable than to
other senior executives of the Corporation or its subsidiaries.  The Corporation
agrees to reimburse Executive for all medical costs and expenses incurred by him
which  are not  covered  by

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the  Corporation's  group medical  plans,  up to an aggregate  maximum amount of
$100,000 per annum, upon submission of appropriate and itemized documentation.

            3.3. The Corporation agrees to pay the Executive a  car allowance of
$1,000 per month.

            3.4. The  Corporation  agrees to  reimburse  the  Executive  for all
reasonable  and  necessary  business  expenses  incurred by him on behalf of the
Corporation in the course of his duties  hereunder upon the  presentation by the
Executive of appropriate vouchers therefor.

            3.5. The Executive will be entitled each year of this Agreement to a
paid vacation of five weeks,  no more than half of which can be carried  forward
to future years.

            3.6. Upon termination of this Agreement for Cause or due to death or
incapacity of the  Executive (as defined in Section 4.1),  the Executive (or his
estate) shall be entitled to all unpaid compensation  (including pro-rata Bonus)
and benefits accrued to the date of termination.

            3.7. The Executive shall not be required to mitigate  damages or the
amount of any payment  provided  to him under this  Agreement  by seeking  other
employment or otherwise.

            3.8. If the Executive's  employment  with the  Corporation  shall be
terminated  by the  Corporation  due to death or incapacity of the Executive (as
defined in Section 4.1), then, effective upon the date of termination, all stock
options and  restricted  stock held by the Executive  beneficially  (in trust or
otherwise) and/or of record,  including,  without limitation,  all stock options
and  restricted  stock held in trust for the benefit of the Executive in any Key
Employee  Share Option  Plan,  or similar  plan,  as may be  established  at the
Corporation's discretion,  shall vest and become immediately exercisable (and in
the case of stock  options,  shall remain  exercisable  by the  Executive or his
estate for one year following such termination).

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            4.   INCAPACITY; DEATH
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            4.1. If,  during the  period of  employment  hereunder,  because  of
illness  or other  incapacity,  the  Executive  shall  fail for a period  of 120
consecutive  days, or for shorter periods  aggregating more than 120 days during
any twelve month period, to render the services contemplated hereunder, then the
Corporation, at its option, may terminate the term of employment hereunder, upon
not less than 30 days  written  notice from the  Corporation  to the  Executive,
effective on the 30th day after giving of such notice;  PROVIDED,  HOWEVER, that
no such termination will be effective if prior to the 30th day after giving such
notice, the Executive's illness or incapacity shall have terminated and he shall
be physically and mentally able to perform the services required hereunder.

            4.2. In the event of the  death of the  Executive  during  the  term
hereof,  the employment  hereunder  shall  terminate on the date of death of the
Executive.

            4.3. The  Corporation  (or  its  designee)  shall  have the right to
obtain for its benefit an appropriate  life insurance  policy on the life of the
Executive,  naming the  Corporation  (or its  designee) as the  beneficiary.  If
requested  by the  Corporation,  the  Executive  agrees  to  cooperate  with the
Corporation in obtaining such policy.

            4.4. In the event the  employment  of Executive is terminated by the
Corporation  as the  result of the death or  incapacity  of the  Executive,  the
Corporation  agrees to make a payment to the Executive (or his estate) within 15
days of such termination equal to the Executive's  annual salary in effect as of
the date of such  termination,  plus the average of his annual  bonuses over the
last three years, less the amount of employer-paid disability insurance received
by Executive under his benefit plan.

            5.   OTHER    ACTIVITIES    DURING    EMPLOYMENT;   NON-COMPETITION;
                 ---------------------------------------------------------------
                 SOLICITATION.
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            5.1. The   Executive  shall not  during  the Term of this  Agreement
undertake  or engage in other  employment,  occupation  or business  enterprise.
Subject to compliance with the

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provisions of this Agreement,  the Executive may engage in reasonable activities
with respect to personal investments of the Executive.

            5.2. During the Term of this Agreement, and for a period of one year
after the Executive leaves the employ of the Corporation,  in the event that (a)
the  Corporation  terminates the  Executive's  employment  with the  Corporation
pursuant to Sections 2.2 or 4.1, or (b) the Executive  terminates his employment
with the Corporation for any reason other than Good Reason following a Change in
Control, then:

                  5.2.1  Neither the Executive nor any entity in which he may be
interested as a partner,  trustee,  director,  officer,  employee,  shareholder,
option  holder,  lender of money,  guarantor  or  consultant,  shall be  engaged
directly or indirectly  in any business  engaged in by the  Corporation,  or any
subsidiary, in any area where the Corporation, or any subsidiary,  conducts such
business at any time during this Agreement; provided however, that the foregoing
shall not be deemed to prevent the  Executive  from  investing in  securities if
such  class of  securities  in which  the  investment  is so made is listed on a
national  securities exchange or is issued by a company registered under Section
12(g) of the Securities  Exchange Act of 1934 ("Exchange  Act"), so long as such
investment  holdings do not, in the  aggregate,  constitute  more than 5% of the
voting stock of any company's securities; and

                  5.2.2 The Executive shall not solicit ( or assist or encourage
the  solicitation of) any employee of the Corporation or any of its subsidiaries
or affiliates to work for Executive or for any  business,  firm  corporation  or
other entity in which the  Executive,  directly or  indirectly,  in any capacity
described  in  Section  5.2  hereof,  participates  or  engages  (or  expects to
participate  or engage)  or has (or  expects to have) a  financial  interest  or
management position.

            5.3. The  Executive  shall not at any time during this  Agreement or
after the  termination  hereof  directly or indirectly  divulge,  furnish,  use,
publish or make accessible to any person or entity any Confidential  Information
(as hereinafter  defined).  Any records of Confidential  Information prepared by
the Executive or which come into  Executive's  possession

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during this  Agreement are and remain the property of the  Corporation  and upon
termination of Executive's  employment all such records and copies thereof shall
be either left with or returned to the Corporation.

            5.4 The  term  "Confidential  Information"  shall  mean  information
disclosed to the  Executive or known,  learned,  created or observed by him as a
consequence of or through his employment by the Corporation, not generally known
in the  relevant  trade  or  industry,  about  the  Corporation's  or any of its
subsidiaries'  or  affiliates'  business  activities,  services  and  processes,
including  but  not  limited  to  information  concerning   advertising,   sales
promotion,  publicity,  sales data,  research,  finances,  accounting,  methods,
processes,  business  plans,  broker  or  correspondent  lists and  records  and
potential broker or correspondent lists and records.

            6.    CHANGE IN CONTROL.
                  ------------------

            6.1. For purposes  hereof,  a "Change in Control" shall be deemed to
have  occurred  if (a) during any  period of 12 months,  individuals  who at the
beginning of such period  constitute  the Board of Directors of the  Corporation
cease for any reason to constitute a majority  thereof  unless the election,  or
the nomination for the election by the  Corporation's  stockholders  of each new
director  was  approved by a vote of at least a majority of the  directors  then
still in office who were directors at the beginning of the period,  (b) a person
or group of  persons  acting in  concert  (as  defined  in Section 13 (a) of the
Exchange Act), other than one or more members of the Miller Family  (hereinafter
defined),  acquires beneficial ownership,  within the meaning of Rule 13 (d) (3)
of the Rules and  Regulations  of the  United  States  Securities  and  Exchange
Commission  promulgated  pursuant  to the  Exchange  Act,  of a number of voting
shares of the Corporation  which  constitutes  50% or more of the  Corporation's
outstanding  voting  shares,  (c) the  Corporation  is merged,  consolidated  or
reorganized  into or with another  corporation or another legal entity and, as a
result of such merger,  consolidation  or  reorganization,  less than 50% of the
combined voting power of the then-outstanding  securities of such corporation or
entity  immediately  after  such  transaction  is held in the  aggregate  by the
holders  of the  combined  voting

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power of the  securities of the  Corporation  entitled to vote  generally in the
election of directors of the Corporation  immediately prior to such transaction,
or (d) the Corporation undergoes a liquidation or dissolution or, in one or more
transactions  occurring  within a consecutive  12-month period, a sale of all or
substantially all of the assets of the Corporation. No merger,  consolidation or
corporate reorganization in which the owners of the combined voting power of the
Corporation's  then  outstanding  voting  securities  entitled to vote generally
prior to said combination, own 50% or more of the resulting entity's outstanding
voting securities shall, by itself, be considered a Change in Control.

                  6.1.1.  For  purposes  of this  Agreement,  the  term  "Miller
Family"  shall mean Hugh Miller,  Marc E. Miller,  Sidney Miller and Lee Miller,
any of  their  respective  spouses  or  lineal  descendants,  or any  trust  the
beneficial interests of which are held by such persons.

            6.2. If, upon a Change in Control,  as defined  under Section 6, the
Executive's employment with the Corporation is terminated by the Corporation, or
the Executive terminates his employment with the Corporation for Good Reason (as
defined in Section  2.6),  in each case within a  twenty-four  (24) month period
following  a Change in Control  (each a "Change in  Control  Termination"),  the
Executive shall be entitled to the following severance compensation and benefits
in lieu of any payments which would otherwise be payable under Section 2.4

                  (a)  within  15 days  of the  date of the  Change  in  Control
Termination (the "Change in Control  Termination  Date"),  the Corporation shall
pay the  Executive  all  amounts of earned or accrued  compensation  through the
Executive's termination date, including reasonable business expenses;

                  (b) within 15 days of the Change in Control  Termination Date,
the Corporation  shall pay the Executive as severance and in lieu of any further
compensation for periods subsequent to the Change in Control Termination Date an
amount equal to the product of (1) 299%,  multiplied by (2) the last five years'
average annual compensation as calculated in accordance with Section 280G of the
Code; and

                                       9

                  (c) the Corporation  shall continue on behalf of the Executive
and his dependents and  beneficiaries the life insurance,  disability,  medical,
dental, prescription drug and hospitalization coverages and benefits provided to
the Executive immediately prior to the Change in Control Termination Date or, if
greater, the coverages and benefits generally provided at any time thereafter by
the  Corporation to its senior officers for the remaining Term of this Agreement
following the Change in Control  Termination  Date.  Health  benefits  otherwise
receivable by the Executive pursuant to this Section 6.2 shall be reduced to the
extent comparable  benefits are actually  available to the Executive during such
period from a subsequent Employer.

            6.3.  Executive  shall not be required to mitigate the amount of any
payment provided for in this Section 6 by seeking employment or otherwise.

            6.4 Upon the  occurrence  of a Change in Control,  all stock options
and restricted stock held by the Executive  beneficially (in trust or otherwise)
and/or  of  record,  including,   without  limitation,  all  stock  options  and
restricted  stock  held in trust for the  benefit  of the  Executive  in any Key
Employee  Share Option  Plan,  or similar  plan,  as may be  established  at the
Corporation's  discretion,  shall vest and become immediately exercisable on the
date of the Change in Control  (and in the case of stock  options,  shall remain
exercisable by the Executive  until the  termination  date stated in the related
stock option certificates).

            6.5.  In the event that any  payment or  benefit  received  or to be
received by Executive in connection  with a Change in Control of the Corporation
or the termination of Executive's  employment  (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Corporation,
any person whose actions result in a Change in Control or any person  affiliated
with the corporation or such person)  (collectively  the "Total Payments") would
not be deductible (in whole or in part) as a result of Section 280G of the Code,
by the  Corporation,  an  affiliate  or other  person  making  such  payment  or
providing  such benefit,  the payments or benefits  shall be so reduced until no
portion of the Total Payments is not deductible.  Executive shall be entitled to
elect  which  payments or benefits  shall be so  reduced.

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For  purposes  of this  limitation,  (1) no  portion of the Total  Payments  the
receipt or enjoyment of which the  Executive  shall have  effectively  waived in
writing prior to the date of payment shall be taken into account, (2) no portion
of the Total  Payments  shall be taken into account  which in the opinion of tax
counsel  selected by the  Corporation  and  acceptable to the Executive does not
constitute a "parachute  payment"  within the meaning of Section 280G (b) (2) of
the Code,  and (3) the value of any  noncash  benefit  or  deferred  payment  or
benefit included in the Total Payments shall be determined by the  Corporation's
independent auditors in accordance with the principles of Section 280(d) (3) and
(4) of the Code.

            7. ASSIGNMENT. The Corporation shall require any successor or assign
               -----------
to all or substantially all the assets of the Corporation  (whether by merger or
by  acquisition  of stock,  assets or otherwise)  prior to  consummation  of any
transaction therewith,  to expressly assume and agree to perform in writing this
Agreement in the same manner and to the same extent that the  Corporation  would
be required to perform it if no such  succession or assignment  had taken place.
This  Agreement  shall  inure  to  the  benefit  of  and  be  binding  upon  the
Corporation,  its successors and assigns,  and upon the Executive and his heirs,
executors, administrators and legal representatives. This Agreement shall not be
assignable by the Executive.

            8. NO THIRD PARTY BENEFICIARIES. This Agreement does not create, and
               -----------------------------
shall not be construed as creating,  any rights  enforceable by any person not a
party to this Agreement, except as provided in Section 7 hereof.

            9. HEADINGS.  The headings of the sections  hereof are inserted for
               ---------
convenience  only  and  shall not  be deemed  to constitute a part hereof nor to
affect the meaning thereof.

            10.INTERPRETATION.  In  case  any  one  or  more  of the  provisions
               ---------------
contained  in this  Agreement  shall,  for any  reason,  be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other  provisions of this Agreement,  and
this Agreement shall be construed as if such invalid,  illegal or  unenforceable

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provision had never been contained herein. If, moreover,  any one or more of the
provisions  contained in this Agreement  shall for any reason be held by a court
of competent jurisdiction to be unenforceable because it is excessively broad as
to duration,  geographical scope,  activity or subject, it shall be construed by
limiting and reducing it, so as to be enforceable to the extent  compatible with
the applicable law as it shall then appear.

            11.NOTICES.    All notices under this Agreement  shall be in writing
               --------
and shall be deemed to have been given at the time when mailed by  registered or
certified  mail,  addressed to the address below stated party to which notice is
given,  or to such changed  address as such party may have fixed by notice given
as set forth herein:

            To the Corporation:

            Delta Financial Corporation
            1000 Woodbury Road
            Suite 200
            Woodbury, New York 11797
            Attn: General Counsel

                  And

            To the Executive:

            Sidney A. Miller
            10 Ballantine Lane
            Great Neck, NY 11024

provided,  however, that any notice of change of address shall be effective only
upon receipt.

            12.WAIVERS. If either party should waive any breach of any provision
               --------
of  this  Agreement, he  or  it shall not  thereby  be deemed to have waived any
preceding   or  succeeding  breach  of   the same or any other provision of this
Agreement.

            13.COMPLETE AGREEMENT; AMENDMENTS.   The  foregoing  is  the  entire
               -------------------------------
agreement of the parties with respect to the subject  matter  hereof and may not
be amended,  supplemented,  canceled or discharged except by written  instrument
executed by both parties hereto.

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            14.EQUITABLE REMEDIES. The  Executive  acknowledges that he has been
               -------------------
employed  for his  unique  talents  and  that  his  leaving  the  employ  of the
Corporation  would seriously hamper the business of the Corporation and that the
Corporation will suffer irreparable damage if any provisions of Section 5 hereof
are not  performed  strictly in  accordance  with their  terms or are  otherwise
breached.  The Executive hereby  expressly agrees that the Corporation  shall be
entitled  as a matter  of right to  injunctive  or other  equitable  relief,  in
addition  to all  other  remedies  permitted  by law,  to  prevent  a breach  or
violation  by the  Executive  and to secure  enforcement  of the  provisions  of
Section 5. Resort to such  equitable  relief,  however,  shall not  constitute a
waiver or any other rights or remedies, which the Corporation may have.

            15.GOVERNING LAW. This Agreement is to be  governed by and construed
               --------------
in accordance  with the laws of the State of New York,  without giving effect to
principles of conflicts of law.

     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as the
date first above written.

                                          DELTA FINANCIAL CORPORATION
                                          By:/S/ RICHARD BLASS
                                             ----------------------------
                                          Name: Richard Blass
                                          Title: Executive Vice President


                                          /S/ SIDNEY A. MILLER
                                          -------------------------------
                                          SIDNEY A. MILLER



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