EMPLOYMENT AGREEMENT


               This  Agreement  is made as of the  1st  day of  September,  1998
between Outsourcing Solutions Inc., a Delaware corporation,  with offices at 390
South Woods Mill Road, Suite 350, Chesterfield,  Missouri 63017 (the "Company"),
and Michael A.  DiMarco,  an  individual  residing in the State of Missouri (the
"Employee").

                                    RECITALS

               WHEREAS,   the  Company   desires  to  secure  the  services  and
employment of the Employee on behalf of the Company, and the Employee desires to
enter  into  employment  with  the  Company,   upon  the  terms  and  conditions
hereinafter set forth.

               NOW,  THEREFORE,  in  consideration  of the mutual  covenants and
promises  contained  herein,  the parties  hereto,  each intending to be legally
bound hereby, agree as follows:

               1.  Employment.  The  Company  hereby  employs  the  Employee  as
Executive  Vice  President--President  of Fee Services of the  Company,  and the
Employee  accepts such  employment for the term of the  employment  specified in
Section 3 below.  During the Employment  Term (as defined  below),  the Employee
shall serve as the Executive  Vice  President--President  of Fee Services of the
Company,  performing  such  duties as shall be  reasonably  required  of such an
employee of the Company, and shall have such other powers and perform such other
additional  executive  duties as may from time to time be assigned to him by the
Board of Directors of the Company.  The  Employee's  primary place of employment
shall be St. Louis, Missouri.

               2.  Performance.  The Employee will serve the Company  faithfully
and to the best of his ability and will  devote  substantially  all of his time,
energy,  experience and talents  during regular  business hours and as otherwise
reasonably necessary to such employment,  to the exclusion of all other business
activities.

               3.  Employment  Term. The employment term shall begin on the date
of  this  Agreement  and  continue  until  December  31,  1999,  unless  earlier
terminated pursuant to Section 7 below (the "Employment Term");  provided,  that
on December 31, 1999 and on each  anniversary  thereafter,  the Employment  Term
shall be automatically  extended for an additional twelve month period unless 30
days prior to such  anniversary  date either the Company or the  Employee  shall
give written notice of termination of the Agreement, in which case the Agreement
will terminate at the end of the then existing Employment Term.

               4.  Compensation.

               (a) Salary. During the Employment Term, the Company shall pay the
Employee a base salary,  payable in equal semimonthly  installments,  subject to
withholding  and other  applicable  taxes,  at an annual  rate of Three  Hundred
Twenty Five Thousand Dollars ($325,000.00).

               (b) Bonus.  For   the  period  commencing  on the  date  of  this
Agreement and ending on December 31, 1998, the Employee shall receive a bonus of
no less than  $220,000 and the Company  shall pay the Employee  such  guaranteed
amount,  subject to withholding and other  applicable  taxes, on or before March
15, 1999.  Commencing on January 1, 1999,  the Employee  shall be eligible for a
target annual bonus of 67% of his base salary.  Annual  bonuses  (other than the
guaranteed  portion of the 1998  bonus)  shall be based on the  satisfaction  of
performance  targets established by the Board of Directors on or before December
31 of each year for the next succeeding year.

               (c) Medical and  Dental  Health,  Life and  Disability  Insurance
Benefits.  During the Employment Term, the Employee shall be entitled to medical
and  dental  health,  life  insurance  and  disability   insurance  benefits  in
accordance  with the  Company's  established  practices  with respect to its key
employees.

               (d) Vacation;  Sick  Leave.  During  the  Employment   Term,  the
Employee  shall be entitled to vacation  and sick leave in  accordance  with the
Company's established practices with respect to its key employees.

               5.  Expenses.

                   (a) The Employee  shall  be reimbursed by the Company for all
reasonable expenses incurred  by him in connection  with the  performance of his
duties hereunder in  accordance with policies established by the Board from time
to time and upon receipt of appropriate documentation.

                   (b) The  Employee shall  be  reimbursed  by  the  Company for
normal moving and relocation expenses incurred by Employee to move his residence
to the St. Louis metropolitan area,  including  reasonable  and  customary  real
estate commission, closing costs and discount points and reasonable expenses for
temporary  living,  return home travel and family  travel to St. Louis for house
purchasing purposes. If requested by Employee,  Company shall provide an advance
of $115,000 to facilitate Employee's relocation,  to be repaid to the Company no
later than 48 hours  following  the  closing of the sale of  Employee's  current
residence in Fairview, Texas.

               6.  Secret  Processes  and  Confidential  Information.   For  the
Employment Term and thereafter,  (a) the Employee will not divulge,  transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent  required,  after  prompt  notice to the Company of any such  order),
directly or indirectly,  other than in the regular and proper course of business
of the Company,  any  confidential  knowledge or information with respect to the
operations or finances of the Company or with respect to  confidential or secret
processes, services, techniques,  customers or plans with respect to the Company
and (b) the Employee  will not use,  directly or  indirectly,  any  confidential
information for the benefit of anyone other than the Company; provided, however,
that the Employee has no obligation,  express or implied,  to refrain from using
or disclosing to others any such knowledge or information  which is or hereafter
shall  become  available  to the public  other than  through  disclosure  by the
Employee. All new processes,  techniques, know-how, inventions, plans, products,
patents and devices developed,  made or invented by the Employee,  alone or with
others, while an employee of the Company,  shall be and become the sole property
of the  Company,  unless  released in writing by the  Company,  and the Employee
hereby assigns any and all rights therein or thereto to the Company.

               During the term of this Agreement and thereafter,  Employee shall
not take any action to disparage  or  criticize to any third  parties any of the
services  of the Company or to commit any other  action that  injures or hinders
the business relationships of the Company.

               During the term of this  Agreement and for two years  thereafter,
Employee shall not employ,  solicit for employment or otherwise contract for the
services of any  employee of the  Company or any of its  Affiliates  (as defined
below)  at the  time of this  Agreement  or who  shall  subsequently  become  an
employee of the Company or any of its  Affiliates,  provided that Employee shall
not be  prohibited  from such  solicitation  or  employment if such employee (a)
initiated  discussions with Employee without any direct or indirect solicitation
from  Employee,  (b)  responded  to a general  public  solicitation,  or (c) has
terminated employment with the Company prior to commencement of discussions with
Employee.

               All  files,  records,  documents,  memorandums,  notes  or  other
documents  relating to the business of Company,  whether prepared by Employee or
otherwise  coming into his  possession in the course of the  performance  of his
services under this  Agreement,  shall be the exclusive  property of Company and
shall be delivered to Company and not retained by Employee upon  termination  of
this Agreement for any reason whatsoever.

               7. Termination.  The employment of the Employee  hereunder may be
terminated at any time by the Company with or without  "cause".  For purposes of
this  Agreement,   "cause"  shall  mean:  (i)   embezzlement,   theft  or  other
misappropriation of any property of the Company or any subsidiary, (ii) gross or
willful  misconduct  resulting  in  substantial  loss  to  the  Company  or  any
subsidiary  or  substantial  damage  to the  reputation  of the  Company  or any
subsidiary,  (iii)  any  act  involving  moral  turpitude  which  results  in  a
conviction for a felony involving moral turpitude,  fraud or  misrepresentation,
(iv) gross neglect of his assigned duties to the Company or any subsidiary,  (v)
gross breach of his fiduciary  obligations to the Company or any subsidiary,  or
(vi) any chemical  dependence  which  materially  affects the performance of his
duties and  responsibilities to the Company or any subsidiary;  provided that in
the case of the  misconduct  set  forth in  clauses  (iv) and (vi)  above,  such
misconduct  shall  continue  for a period of 30 days  following  written  notice
thereof by the Company to the Employee.

               8. Severance.  If (a) the Employee's  employment is terminated by
the  Company  without  "cause" or (b) the  Company  does not agree to extend the
Employment Term upon the expiration  thereof,  the Employee shall be entitled to
(i)  receive  an amount  equal to his base  salary  for the year  preceding  the
Employee's  termination,  payable, at the Company's option, in a lump sum on the
date of  termination  or ratably over the one year period  following the date of
termination (the "Severance  Period"),  and (ii) continue to receive the medical
and dental  health  benefits  referred to in Section  4(c) during the  Severance
Period; provided, however, if either such event occurs prior to the extension of
the initial Employment Term, Employee shall be entitled to (i) $325,000, payable
in a lump sum on the date of  termination,  and (ii)  continue  to  receive  the
medical  and dental  health  benefits  referred  to in Section  4(c)  during the
Severance Period. If the Employee's employment is terminated by the Company "for
cause",  the  Employee  shall not be entitled  to  severance  compensation.  The
Employee  covenants  and agrees  that he will not,  during  the one year  period
following the  termination of the Employee's  employment by the Company,  within
any jurisdiction or marketing area in which the Company or any of its Affiliates
(as defined below) is doing business or is qualified to do business, directly or
indirectly own, manage,  operate,  control, be employed by or participate in the
ownership,  management,  operation  or control of, or be connected in any manner
with,  any business of the type and character  engaged in and  competitive  with
that  conducted  by the  Company  or any of its  Affiliates  at the time of such
termination;  provided,  however,  that ownership of securities of 2% or less of
any  class of  securities  of a public  company  shall not be  considered  to be
competition with the Company or any of its Affiliates.  For the purposes of this
Section 8, the term  "Affiliate"  shall mean,  with respect to the Company,  any
person or entity which, directly or indirectly, owns or is owned by, or is under
common ownership with, the Company. The term "own" (including,  with correlative
meanings, "owned by" and "under common ownership with") shall mean the ownership
of 50% or more of the voting  securities  (or their  equivalent) of a particular
entity.

               9. Notice.  Any notices required or permitted  hereunder shall be
in writing and shall be deemed to have been given when  personally  delivered or
when mailed,  certified or registered mail,  postage  prepaid,  to the following
addresses:

               If to the Employee:
                             Michael A. DiMarco
                             247 Doulton Place
                        Town and Country, Missouri 63141

               If to the Company:

                             Outsourcing Solutions Inc.
                      390 South Woods Mill Road, Suite 350
                          Chesterfield, Missouri 63017
                                 Attn: President

               With a copy to:

                             McCown De Leeuw & Co.
                             101 East 52nd Street
                             31st Floor
                             New York, New York 10022
                             Attention:  David E. King



<PAGE>


               10. General.

               (a) Governing Law;  Jurisdiction.  The validity,  interpretation,
construction  and performance of this Agreement shall be governed by the laws of
the State of Missouri  applicable  to  contracts  executed  and to be  performed
entirely within said State. Any judicial  proceeding  brought against any of the
parties to this  Agreement or any dispute  arising out of this  Agreement or any
matter  related  hereto may be brought in the courts of the State of Missouri or
in the United States District Court for the Eastern  District of Missouri,  and,
by  execution  and  delivery  of this  Agreement,  each of the  parties  to this
Agreement accepts the jurisdiction of said courts,  and irrevocably agrees to be
bound by any judgment  rendered  thereby in connection with this Agreement.  The
foregoing  consent to  jurisdiction  shall not be deemed to confer rights on any
person other than the respective parties to this Agreement.

               (b) Assignability. The Employee may not assign his interest in or
delegate his duties under this Agreement.  Notwithstanding anything else in this
Agreement  to the  contrary,  the Company may assign this  Agreement  to and all
rights  hereunder shall inure to the benefit of any person,  firm or corporation
succeeding to all or substantially  all of the business or assets of the Company
by purchase, merger or consolidation.

               (c)  Enforcement  Costs.  In the event that either the Company or
the Employee  initiates  an action or claim to enforce any  provision or term of
this  Agreement,  the  costs and  expenses  (including  attorney's  fees) of the
prevailing  party shall be paid by the other  party,  such party to be deemed to
have prevailed if such action or claim is concluded pursuant to a court order or
final  judgment  which is not  subject  to appeal,  a  settlement  agreement  or
dismissal of the principle claims.

               (d) Binding  Effect.  This  Agreement  is for the  employment  of
Employee,  personally,  and for  the  services  to be  rendered  by him  must be
rendered by him and no other person.  This  Agreement  shall be binding upon and
inure to the benefit of the Company and its successors and assigns.

               (e) Entire Agreement;  Modification.  This Agreement  constitutes
the entire  agreement of the parties  hereto with respect to the subject  matter
hereof  and may not be  modified  or amended in any way except in writing by the
parties hereto.

               (f) Duration.  Notwithstanding the term of employment  hereunder,
this Agreement shall continue for so long as any  obligations  remain under this
Agreement.

               (g) Survival. The covenants set forth in Sections 6 and 8 of this
Agreement  shall  survive  and  shall  continue  to  be  binding  upon  Employee
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants  set forth in Sections 6 and 8 of this  Agreement  shall be deemed and
construed  as separate  agreements  independent  of any other  provision of this
Agreement.  The  existence  of any claim or cause of action by Employee  against
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by Company of any or all covenants. It is expressly
agreed that the remedy at law for the breach or any such  covenant is inadequate
and that  injunctive  relief  shall be  available  to prevent  the breach or any
threatened breach thereof.

               IN WITNESS WHEREOF,  the parties hereto,  intending to be legally
bound,  have  hereunto  executed  this  Agreement the day and year first written
above.

                                            OUTSOURCING SOLUTIONS INC.

                                            By
                                              /s/Timothy G. Beffa
                                              ----------------------------------
                                              Timothy G. Beffa, President and
                                              Chief Executive Officer


                                    EMPLOYEE

                                              /s/Michael A. DiMarco
                                              ----------------------------------
                                              Michael A. DiMarco