OUTSOURCING SOLUTIONS INC.




                                   YEAR 2000
                           MANAGEMENT INCENTIVE PLAN
                                     (MIP)


<PAGE>

OUTSOURCING SOLUTIONS INC.

Bonus Incentive Compensation Plan Description and Payout Guidelines for 2000

I.      Purpose

        Outsourcing  Solutions  Inc.  (the  Company)  has  created   this  Bonus
        Incentive Compensation  Plan to provide  significant cash incentives for
        executives,  managers, and other  key personnel to  attain the Company's
        EBITDA and  certain other business  objectives as may  be established by
        the  Chief  Executive  Officer and/or the Compensation  Committee of the
        Board of  Directors  of  the  Company.  The  Plan is intended to provide
        financial  recognition  for  the results  these  individuals  achieve in
        exercising their judgement, initiative and effort.

II.     Effective Date

        This  Plan  is  effective  January 1, 2000, is intended  to run annually
        thereafter  concurrent  with  the  Company's  fiscal  year  (January 1 -
        December 31) and is subject to annual review / modification by the Chief
        Executive Officer.

III.    Participation

        Participation  in  the  Plan  is  limited  to  executives,  managers and
        equivalent and key professional personnel. Each  year, senior management
        of the Company will recommend to the CEO the participants for that year.

        Once eligible, persons  not employed in a designated position for a full
        calendar year will be eligible for incentive payments on a prorata basis
        for  their  period  of  participation.  A  person  must  be  employed by
        September 30 in order  to receive  a prorata  incentive payment  for the
        calendar year.

        An individual  must be  on the  payroll at  December 31  in order  to be
        eligible to receive an incentive payment for that year. Participants who
        terminate  employment  after  December 31  but  prior  to the  date when
        payouts are made will not receive  an  incentive  payment except  at the
        discretion  of  the CEO. Participants  whose  employment  is  terminated
        during the year  as a result of  retirement, disability, or death may be
        eligible for  a prorata incentive  payment and will be at the discretion
        of the CEO.

        An employee is  eligible to  participate in  only one  Company incentive
        compensation plan at  a time.  Individuals  participating  in commission
        plans, override plans,  or branch productivity plans are not eligible to
        participate in this Plan.  Participants in this Plan are not eligible to
        participate in any other incentive plan.

IV.     Target Bonus Incentive Compensation Awards

        Target awards represent  the percent  of base salary at December 31 that
        would be paid when Consolidated Corporate,  Business Unit and Individual
        objectives are completely fulfilled.  Payout will be done based upon the
        attainment  of the  financial  and  other  incentives which  will be set
        annually as part of the annual  budget cycle.  These incentives  will be
        reflected in the format on the attached matrix draft. While these awards
        will be  determined  based  on  the actual  performance  of the  company
        utilizing the attached matrices, in no case will the bonuses exceed 160%
        of the target. No awards  will be paid  when the  Company's consolidated
        actual performance is less than as indicated on  the matrix chart unless
        authorized by the CEO and/or  the Compensation  Committee at which time,
        any payouts  would be deemed  fully discretionary. Bonus  payments which
        meet the minimum requirements but are less than the maximum payouts will
        be interpolated from the respective matrices.

        Unbudgeted  acquisition impact on target performance will be measured at
        a rate of 50%  of incremental EBITDA. Acquisition impact on targets will
        generally  affect only the  Consolidated Corporate Portion of the award.
        Acquisition impact will affect the Business Unit targets if the acquired
        entity becomes a part of the Business Unit.

V.      Performance Criteria

          A.   Corporate Criteria: Represent W percent of total target award and
               will be determined on the percentage attainment of approved  Con-
               solidated Corporate Revenue and EBITDA  objectives  as determined
               annually.

          B.   Leverage Criteria:  Represent X percent of total target award and
               will  be  determined  on  the  level  of  year-end leverage ratio
               attained.


          C.   Business Unit Criteria: Represent Y percent of total target award
               and will be determined on the percentage  attainment  of approved
               business   unit  Revenue  and  EBITDA  objectives  as  determined
               annually.


          D.   Individual  Criteria:  Represent Z percent of total  target award
               and will be  determined  based on the  attainment  of  individual
               objectives as judged by each participant's supervisor. Individual
               objectives will be weighted,  with the total weight equal to 100%
               of the  individual  portion  (Z) of the total  target  award.  No
               corporate,  business unit, or individual  bonuses will be paid if
               actual Consolidated Corporate EBITDA is less than as indicated on
               the  matrix  chart  unless  authorized  by  the  CEO  and/or  the
               Compensation Committee at which time, any payouts would be deemed
               fully discretionary.

          E.   Objective  Mix:  Target awards will be  determined  based upon an
               appropriate  mix of Corporate,  Business  Unit(s) and  Individual
               objectives.  In general,  the mix of objectives  should generally
               follow as indicated below. The mix of objectives  should consider
               the  nature  and  direct  financial  impact  of  an  individual's
               responsibilities  as they relate to the overall financial results
               of the Company.

Position            Corporate     Leverage     SBU      Ind. Group    Individual
--------            ---------     --------     ---      ----------    ----------
CEO                    70%          15%         -            -           15%
CFO, Corp. SVP's       70%          15%         -            -           15%
SBU Heads              30%          15%        40%           -           15%
Corp. VP's        ----------85%---------        -            -           15%
SBU Mgmt.              25%          15%        ------50%---------        10%
Staff Mgmt                60 - 70%                                    30 - 40%

<PAGE>

          E.   Computation Examples:

               Assume:  SBU Mgmt eligible for 20% target based on 25% Corporate,
               15%, Leverage, 50%, Business unit and 10% Individual:

               Base Salary:                 $80,000
               Target Award:                20% of base or $16,000
                      Corporate portion:           25% of $16,000 or $4,000
                      Leverage portion:            15% of $16,000 or $2,400
                      Business unit portion:       50% of $16,000 or $8,000
                      Individual portion:   10% of $16,000 or $1,600
               Minimum award:                      0%
               Maximum award:                      $25,600
<TABLE>
<CAPTION>
               1.  Performance Situation #1:
                   -------------------------
<S>                                                                                  <C>        <C>        <C>
                      Corporate performance 85% of plan, payout (85% x 4,000):         $  3,400
                      Leverage performance 80% of plan, payout (80% x 2,400):          $  1,920
                      Business unit performance 100% of plan, payout (100% x 8,000):              $  8,000
                      Individual performance judged 110% of plan, payout (110% x 1,600):          $  1,760
                                                                                                  --------
                                                                                                             $15,080

               2.  Performance Situation #2:
                   -------------------------
                      Corporate performance 115% of plan, payout (115% x 4,000):                  $  4,600
                      Leverage performance 100% of plan, payout (100% x 2,400):                   $  2,400
                      Business unit performance 100% of plan, payout (100% x 8,000):              $  8,000
                      Individual performance judged 85% of plan, payout (85% x 1,600): $  1,360
                                                                                       --------
                                                                                                             $16,360
               3.  Performance Situation #3:
                   -------------------------
                      Corporate performance 100% of plan, payout (100% x 4,000):                  $  4,000
                      Leverage performance 120% of plan, payout (120% x 2,400):                   $  2,880
                      Business unit performance 85% of plan, payout (85% x 8,000):                $  6,800
                      Individual performance judged 70% of plan, payout (70% x 1,600): $  1,120
                                                                                       ---------
                                                                                                             $14,800

</TABLE>
VI.     Bonus Incentive Compensation Pool

        A Bonus Incentive Compensation Pool will be accrued annually and will be
        allocated  among  participants  based  on a  combination  of  corporate,
        business unit, and individual performance. The size of the  pool will be
        determined  annually  based  on  Company and  Business Unit  performance
        against targets and the base salaries of the participants of the Plan.

VII.    Plan Administration

        Participation: In December  of  each year Management will compile a list
        of all  employees  eligible for  the  following  year and  submit it for
        review and approval by the CEO.

        Payouts:  Payouts will be  made in a single  lump sum by March 31 of the
        year following the year in which bonuses were earned.


VIII.   Management Rights

        This  Plan  replaces  all  prior  bonus  incentive  compensation  plans.
        Outsourcing  Solutions Inc. reserves the right to alter, amend, suspend,
        or   terminate  this   Plan  prospectively  (and   any   other  variable
        compensation plan)  at any time  without notice  and without  any future
        liability.

        Designation  of  job  classification,  salary  grade, or  an  individual
        neither  guarantees  the  individual  a right  to a bonus nor a right to
        continued employment.  The payout  guidelines and  formulas described in
        Section V  herein,  as  well  as  actual  payouts  recommended,  may  be
        adjusted,  modified, or revised at any time at the discretion of the CEO
        subject to approval of the Board of Directors.

        An employee who is included in this Plan may be given certain individual
        performance objectives to achieve in order  in qualifying  for any bonus
        payment.  Such  objectives, and  the standards  by which  achievement is
        measured,  may vary from job-to-job, and will be determined at the start
        of  each  calendar  year  through  discussions  between  the  employee's
        supervisor and the  employee, and  must be approved  by the supervisor's
        supervisor. Approved individual performance objectives must be submitted
        in  writing  to the  CEO for  approval no  later than  January 31 of the
        calendar  year  for  which  they  apply.   Such  individual  performance
        objectives  may be  reviewed  and  modified  by  meeting  and  co-signed
        agreement of  the employee  and the  employee's supervisor  at any  time
        during the calendar year.

<PAGE>
<TABLE>
<CAPTION>
                                          Outsourcing Solutions Inc.
                                          Corporate Matrix Year 2000
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S>                      <C>               <C>               <C>              <C>                <C>
       REVENUES
                          $505.0            $539.0            $572.5            $606.0             $640.0
Adjusted                                                      Budget
EBITDA  *
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $75.0              .40               .55               .70               .85                1.0
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $83.4              .55               .70               .85               1.0                1.15
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
        $91.8              .70               .85               1.0               1.15               1.3
        Budget
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $100.2             .85               1.0               1.15              1.3                1.45
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $108.6             1.0               1.15              1.3               1.45               1.6
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

* Adjusted EBITDA is calculated as EBITDA less portfolio amortization.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           Outsourcing Solutions Inc.
                                         Contingency Matrix Year 2000
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S>                      <C>               <C>               <C>              <C>                <C>
       REVENUES
                          $370.0            $387.5            $405.1            $422.7            $440.2
Adjusted                                                      Budget
EBITDA

-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $62.0              .40               .55               .70               .85               1.0
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $66.5              .55               .70               .85               1.0               1.15
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $71.7              .70               .85               1.0               1.15              1.3
        Budget
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $76.9              .85               1.0               1.15              1.3               1.45
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $81.4              1.0               1.15              1.3               1.45              1.6
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                          Outsourcing Solutions Inc.
                                         Outsourcing Matrix Year 2000
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S>                      <C>               <C>               <C>              <C>                <C>
       REVENUES
                          $75.0             $85.0             $94.8             $104.6            $114.6
Adjusted                                                      Budget
EBITDA

-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

         $9.0              .40               .55               .70               .85               1.0
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $10.8              .55               .70               .85               1.0               1.15
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
        $12.7              .70               .85               1.0               1.15              1.3
        Budget
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $14.6              .85               1.0               1.15              1.3               1.45
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $16.4              1.0               1.15              1.3               1.45              1.6
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                          Outsourcing Solutions Inc.
                                          Portfolio Matrix Year 2000
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
<S>                      <C>               <C>               <C>              <C>                <C>
      REVENUES
                          $70.0             $79.0             $88.3             $97.6             $106.6
Adjusted
EBITDA

-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $12.0              .40               .55               .70               .85               1.0
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $14.0              .55               .70               .85               1.0               1.15
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $16.0              .70               .85               1.0               1.15              1.3
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $18.0              .85               1.0               1.15              1.3               1.45
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------

        $20.0              1.0               1.15              1.3               1.45              1.6
-------------------- ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>
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<TABLE>
<CAPTION>
                                                     Outsourcing Solutions Inc.
                                                     Leverage Matrix Year 2000
----------------------- ---------- -------------- ------------- ------------- ------------ ------------ ------------
<S>                      <C>           <C>          <C>            <C>           <C>       <C>          <C>
Maximum Leverage Ratio
Total Net Debt/EBITDA
                          4.99          4.75          4.50          4.25          4.00        3.75          3.50
----------------------- ---------- -------------- ------------- ------------- ------------ ------------ ------------

Total Maximum Net Debt
    (In Millions)         $513          $505          $497          $490          $480        $468          $455
----------------------- ---------- -------------- ------------- ------------- ------------ ------------ ------------

        Bonus
        Payout             .40           .60          .80           1.00          1.20        1.40          1.60

----------------------- ---------- -------------- ------------- ------------- ------------ ------------ ------------


Indebtedness includes: Senior Bank Debt, Sub Debt, Capital Leases, Letters of Credit less cash on hand

</TABLE>