<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended June 30, 1999

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from ________ to ___________

Commissions file number: 0-26906

                               ASTA FUNDING, INC.
        (Exact name of small business issuer as specified in its charter)

           Delaware                                    22-3388607
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


210 Sylvan Ave., Englewood Cliffs, New Jersey                       07632
      (Address of principal executive offices)                    (Zip Code)

Issuer's telephone number:  (201) 567-5648

Former name, former address and former fiscal year, if changed since
last report: N/A

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 1, 1999, the registrant
had 3,945,000 common shares outstanding.

Transitional Small Business Disclosure Format (check one): Yes        No   X
                                                               -----     -----



<PAGE>






                               Asta Funding, Inc.
                            Form 10-QSB June 30, 1999


                                      INDEX



Part I.  Financial Information

            Item 1.  Financial Statements


                          Consolidated  Balance  Sheets  as  of  June  30,  1999
                          (unaudited) and September 30, 1998

                          Consolidated   Statements   of   Operations   for  the
                          three-and  nine-month  periods ended June 30, 1999 and
                          June 30, 1998 (unaudited)

                          Consolidated   Statements   of  Cash   Flows  for  the
                          nine-month  periods  ended June 30,  1999 and June 30,
                          1998 (unaudited)

                          Notes to consolidated financial statements (unaudited)

            Item 2.  Management's Discussion and Analysis of Financial Condition
                     and Results of Operations


Part II.  Other Information


            Item 1.  Legal Proceedings

            Item 5.  Other Information

            Item 6.  Exhibits and Reports on Form 8-K


Signatures



<PAGE>

ITEM 1. FINANCIAL STATEMENTS

Asta Funding, Inc. and Subsidiaries

Consolidated Balance Sheets
                                                     June 30,      September 30,
                                                  ------------     -------------
                                                      1999             1998
                                                   Unaudited
Assets
Cash                                              $    282,522     $    163,123
Restricted cash and cash equivalents, net               78,163           62,210
Accounts acquired for liquidation                   33,694,628          919,268
Loans receivable, net                               10,807,595       14,984,285
Due from seller                                      3,295,090             --
Accrued interest receivable                            131,273          176,404
Servicing fees receivable                               13,558           28,234
Income taxes receivable                                 20,838          527,463
Servicing assets                                          --             36,403
Residual interest                                         --             13,970
Due from trustee                                        38,259           57,226
Furniture and equipment, net                           167,039          150,015
Repossessed automobiles, net                           461,973          365,787
Other assets                                           129,455          278,664
Deffered income taxes                                   90,050          366,300
                                                  ------------     ------------
          Total assets                            $ 49,210,443     $ 18,129,352
                                                  ============     ============


Liabilities and Stockholders' Equity
Liabilities
Accounts payable and accrued expenses             $    183,940     $    385,399
Advances under lines of credit                       7,156,255       11,449,735
Notes payable                                       32,034,108             --
Income taxes payable                                   369,417             --
Due to affiliate                                     3,113,137          916,487
                                                  ------------     ------------
          Total liabilities                         42,856,857       12,751,621
                                                  ------------     ------------


Stockholders' Equity
Common stock, $.01 par value; authorized
10,000,000 shares; issued and outstanding
3,945,000                                               39,450           39,450
Additional paid-in capital                           9,602,421        9,602,421
Accumulated deficit                                 (3,288,285)      (4,264,140)
                                                  ------------     ------------
          Total stockholders' equity                 6,353,586        5,377,731
                                                  ------------     ------------
Total liabilities and stockholders' equity        $ 49,210,443     $ 18,129,352
                                                  ============     ============



See accompanying notes to consolidated financial statements



<PAGE>
Asta Funding, Inc. and Subsidiaries

Consolidated Statements of Operations
Unaudited

<TABLE>
<CAPTION>

                                        Three Months Ended            Nine Months Ended
                                            June 30,                      June 30,
                                    -----------   -----------    -----------   -----------
                                        1999          1998          1999          1998
                                    -----------   -----------    -----------   -----------

<S>                                 <C>           <C>            <C>           <C>
Revenues:
Interest                            $ 3,288,797   $ 1,894,787    $ 6,048,269   $ 3,098,267
Servicing fees                           44,009       (18,481)       154,395       354,905
Other income                              3,538        31,644         26,888        31,644
                                    -----------   -----------    -----------   -----------
                                      3,336,344     1,907,950      6,229,552     3,484,816
                                    -----------   -----------    -----------   -----------

Expenses:
General and administrative              791,787       620,857      2,037,950     2,061,013
Provision for credit losses             215,000     1,570,366        680,000     2,700,366
Interest                              1,301,150       256,135      1,884,577       447,436
                                    -----------   -----------    -----------   -----------
                                      2,307,937     2,447,358      4,602,527     5,208,815
                                    -----------   -----------    -----------   -----------

Income (loss) before income taxes     1,028,407      (539,408)     1,627,025    (1,723,999)

Income tax expense (benefit)            411,768      (220,190)       651,200      (694,075)

                                    -----------   -----------    -----------   -----------
Net income (loss)                   $   616,639   $  (319,218)   $   975,825   $(1,029,924)
                                    ===========   ===========    ===========   ===========


Net income (loss) per share         $      0.16   $     (0.08)   $      0.25   $     (0.26)
                                    ===========   ===========    ===========   ===========

Weighted average number of shares
      outstanding                     3,945,000     3,945,000      3,945,000     3,945,000
                                    ===========   ===========    ===========   ===========


</TABLE>

See accompanying notes to consolidated financial statements





<PAGE>




Asta Funding, Inc. and Subsidiaries

Consolidated Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>

                                                                    Nine Months Ended
                                                                        June 30,
                                                               ------------    ------------
                                                                   1999            1998
                                                               ------------    ------------
<S>                                                            <C>             <C>
Cash flows from operating activities:
  Net income (loss)                                            $    975,825    $ (1,029,924)
  Adjustments to reconcile net income (loss) to net
    cash (used in) provided by operating activities:
    Depreciation and amortization                                   125,904       1,011,414
    Provision for losses                                            680,000       2,700,366
    Deferred income taxes                                           276,250        (814,897)
    Expenses advanced by affiliate                                   59,000          48,000
    Changes in operating assets and liabilities:
       Accrued interest receivable                                   45,131        (172,445)
       Servicing fees receivable                                     14,676          37,233
       Income taxes receivable                                      506,625            --
       Due from seller                                           (3,295,090)           --
       Other assets                                                 149,209          30,623
       Due from trustee                                              18,967           8,465
       Restricted cash                                              (15,953)        472,566
       Accounts payable and accrued expenses                       (201,459)       (161,149)
       Income taxes payable                                         369,417            --
                                                               ------------    ------------
           Net cash (used in) provided by
               operating activities                                (291,498)      2,130,252

Cash flows from investing activities:
    Loans purchased                                              (2,457,487)    (16,845,723)
    Loan principal payments                                       5,765,544       3,430,008
    Accounts acquired for liquidation                           (55,712,847)     (3,316,510)
    Principal collected on accounts acquired for liquidation     22,937,487       2,133,511
    Capital expenditures                                            (41,261)        (72,066)
                                                               ------------    ------------
            Net cash (used in) investing activities             (29,508,564)    (14,670,780)

Cash flows from financing activities:
    Advances from affiliate                                       2,178,833         177,008
    Increase in bank overdraft                                         --           171,191
    Advances (payments) under lines of credit                    (4,293,480)     11,755,129
    Notes payable                                                32,034,108            --
                                                               ------------    ------------
            Net cash provided by financing activities            29,919,461      12,103,328
                                                               ------------    ------------

Increase (decrease) in cash                                         119,399        (437,200)

Cash at the beginning of period                                     163,123         506,098
                                                               ------------    ------------
Cash at end of period                                          $    282,522    $     68,898
                                                               ============    ============

Supplemental disclosure of cash flow information:
   Cash paid during the period
         Interest                                              $  1,225,609    $    327,304
         Income taxes                                          $       --      $       --


</TABLE>


See accompanying notes to consolidated financial statements




<PAGE>



                               Asta Funding, Inc.
                   Notes to Consolidated Financial Statements

Note 1: Basis of Presentation

Asta Funding, Inc. and its wholly-owned subsidiaries (collectively, the
"Company") are engaged in the business of purchasing in bulk, selling and
servicing performing and non-performing consumer receivables and purchasing and
servicing retail installment sales contracts ("Contracts") originated by
automobile dealers ("Dealers") in the sale primarily of used automobiles. The
Company ceased accepting new automobile Contacts for funding on May 1, 1999 and
will liquidate all remaining Contracts. The Company's fiscal year-end is
September 30.

The consolidated balance sheet as of June 30, 1999, the consolidated statements
of operations for the three-and nine-month periods ended June 30, 1999 and 1998,
and the consolidated statements of cash flows for the nine-month periods ended
June 30, 1999 and 1998, have been prepared by the Company without an audit. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position of the Company
at June 30, 1999 and September 30, 1998, the results of operations for the
three-and nine-month periods ended June 30, 1999 and 1998 and the cash flows for
the nine-month periods ended June 30, 1999 and 1998 have been made. The results
of operations for the three-and nine-month periods ended June 30, 1999 and 1998
are not necessarily indicative of the operating results for any other interim
period or the full fiscal year.

Pursuant to the rules and regulations of the SEC, certain information and
footnote disclosures required under generally accepted accounting principles
have been condensed or omitted from the presented financial statements. We
suggest that these financial statements be read in conjunction with the
financial statements and notes thereto included in our Annual Report on Form
10-KSB for the fiscal year ended September 30, 1998.

Certain reclassifications were made to the 1998 financial statements to conform
to the 1999 presentation.

Note 2: Principles of Consolidation

The consolidated financial statements include the accounts of Asta Funding, Inc.
and its wholly-owned subsidiaries: Asta Auto Receivables Company; E.R.
Receivables Corp., L.L.C.; RAC Acceptance Co., L.L.C.; Palisades Collections,
L.L.C.; Asta Funding Acquisition I, LLC; Asta Funding Acquisition II, LLC; and
Asta Funding Acquisition III, LLC. All significant intercompany balances and
transactions have been eliminated in consolidation.

Note 3: Loans Receivable

The Contracts which the Company purchases from Dealers provide for finance
charges of between 14.95% and 28.95% per annum. Each Contract provides for full
amortization, equal monthly payments and permits prepayments by the borrower at
any time without penalty. The Company generally purchased Contracts at a
discount from the full amount financed under a Contract.

Note 4: Accounts Acquired for Liquidation

Accounts acquired for liquidation are stated at their net realizable value and
consist of consumer loans to individuals throughout the country.

Note 5: Interest Income

Interest income on loans is recognized using the interest method. Accrual of
interest income on loans receivable is suspended when a loan is contractually
delinquent more than 60 days. Interest income on accounts acquired for
liquidation is recognized using either the interest method or the cost recovery
method. Upon acquisition of a portfolio of accounts, the Company's management
estimates the future anticipated cash flows. To the extent that management
determines that the cash flow is reasonably predictable, the interest method is
utilized. To the extent that there is uncertainty as to the timing and amount of
collections, the cost recovery method is utilized. Under the cost recovery
method, no income is recognized until the cost of the portfolio is received. All
subsequent collections are recognized as income upon receipt.

Note 6: Servicing Fees

Servicing fees are reported as income when earned. Servicing costs are charged
to expense as incurred.


<PAGE>

                               Asta Funding, Inc.
 Item 2. Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Overview

The Company is engaged in the business of purchasing in bulk, selling and
servicing performing and non-performing consumer receivables and purchasing and
servicing retail installment sales contracts ("Contracts") originated by
automobile dealers ("Dealers") in the sale primarily of used automobiles. The
Company ceased accepting new Contracts for funding on May 1, 1999, and will
liquidate all remaining Contracts. The Company was formed on July 7, 1994. The
Company's fiscal year-end is September 30.

During the nine month period ended June 30, 1999, the Company concentrated its
business objectives on the purchasing in bulk, selling and servicing of
performing and non-performing consumer receivables. These consumer receivables
consist mainly of the unpaid debts of individuals to various creditors,
including banks, finance companies and other service providers. Most of the
Company's receivables are VISA and MasterCard credit card accounts that the
issuing banks have charged off their books for non-payment. By purchasing these
receivables, the Company allows the creditors to enhance their yields by making
a recovery on these charged-off accounts.

During this period the Company also purchased Contracts between Dealers and
purchasers of automobiles ("Sub-Prime Borrowers") who may have limited credit
histories, low incomes or past credit problems and, therefore, are generally
unable to obtain credit from traditional sources of automobile financing such as
commercial banks, savings and loan associations or credit unions. Sub-Prime
Borrowers typically pay a higher rate of interest than do prime borrowers using
traditional financing sources.

In March 1999, the Company formed three new wholly owned subsidiaries. Asta
Funding Acquisition I, LLC ("AFAI") Asta Funding Acquisition II, LLC ("AFAII")
and Asta Funding Acquisition III, LLC ("AFAIII"). On March 30, 1999, these
entities purchased $1.36 billion of charged-off VISA and MasterCard receivables
from four banks at a substantial discount. Financing of this acquisition was
provided by Sterling Financial Services Company, Greenwich Capital Financial
Products, Inc., Rosenthal & Rosenthal, Inc. and Asta Group, Incorporated, an
affiliate of the Company.

During  1998,  the  Company  formed  three new wholly  owned  subsidiaries.  RAC
Acceptance  Co.,  L.L.C.  ("RAC")  was  formed  to  purchase  military  consumer
automobile  contracts.  At December 31, 1998, RAC had ceased purchasing military
contracts and is currently liquidating all receivables.  E.R. Receivables Corp.,
L.L.C. ("ER") was formed to purchase,  sell and service non-conforming  consumer
loans in bulk from  financial  institutions.  In  addition,  ER is a lender  and
profit participant in the financing of distressed consumer  receivables pursuant
to a loan and security agreement.  Palisades  Collections,  L.L.C. was formed to
act as  sub-servicer  pursuant to the loan and  security  agreement  that ER had
entered into in the financing of distressed consumer receivables.

The Company generates revenues, earnings and cash flow primarily through the
purchase and collection of principal, interest and other payments on consumer
receivables and automobile Contracts.

This Form 10-QSB contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which might not even
be anticipated. The Company's actual results may differ significantly from the
results anticipated in the forward-looking statements. Factors that might cause
such a difference include the ability of the Company to purchase consumer
receivables, changes in government regulations effecting consumer credit,
competition, general business conditions, the effect of the Company's accounting
policies, and other risks identified in the Company's filings with the SEC.
Subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified by the
precautionary statements in this paragraph and elsewhere in this Form 10-QSB.




<PAGE>


                               Asta Funding, Inc.
 Item 2. Management's Discussion and Analysis of Financial Condition and
         Results of Operations


Results of operations

The three-month period ended June 30, 1999, compared to the three-month period
ended June 30, 1998

Revenues. During the three-month period ended June 30, 1999, revenues increased
$1,428,394 compared to the three-month period ended June 30, 1998. Interest
income increased $1,394,010 compared to the three months ended June 30, 1998,
and represented 99% of total revenues for the three-month period ended June 30,
1999. The increase in interest income is due to the increase in the dollar
amount of collections on accounts acquired for liquidation during the
three-month period ended June 30, 1999, as compared to the same period in the
prior year. During the three-month period ended June 30, 1999, the Company
purchased 48 Contracts from Dealers, compared to 285 in the three-month period
ended June 30, 1998. The decrease in Contracts purchased is due to the Company's
decision to discontinue its business of purchasing Contracts and to concentrate
its business objectives in the performing and non-performing consumer
receivables business. The Company earned servicing fees of $44,009 for the three
months ended June 30, 1999, as compared to a loss of $18,481 for the three-month
period ended June 30, 1998.

Expenses. During the three-month period ended June 30, 1999, general and
administrative expense increased $170,930 compared to the three months ended
June 30, 1998 and represented 35% of total expenses. The Increase in general and
administrative expenses is due to a increase in servicing expenses associated
with the accounts acquired for liquidation during the three month period ended
June 30, 1999, as compared to the same period in the prior year.

Interest expense increased by $1,045,015 during the three-month period ended
June 30, 1999 compared to the same period in the prior year and represented 56%
of total expenses for the three-month period ended June 30, 1999. The increase
is due to an increase in the outstanding borrowings by the Company under the
lines of credit, notes payable and borrowings from an affiliate.

During the three-month period ended June 30, 1999, the provision for credit
losses on Contracts purchased decreased by $1,355,366 compared to the three
months ended June 30, 1998 and represented 9% of total expenses. The decrease in
the provision reflects lower quarterly volume of Contracts purchased as compared
to the three months ended June 30, 1998.

The nine-month period ended June 30, 1999, compared to the nine-month period
ended June 30, 1998

Revenues. During the nine-month period ended June 30, 1999, revenues increased
$2,744,736 compared to the nine-month period ended June 30, 1998. Interest
income increased $2,950,002 compared to the nine months ended June 30, 1998, and
represented 97% of total revenues for the nine-month period ended June 30, 1999.
The increase in interest income is due to the increase in the dollar amount of
collections on accounts acquired for liquidation during the nine-month period
ended June 30, 1999, as compared to the same period in the prior year. During
the nine-month period ended June 30, 1999, the Company purchased 351 Contracts
from Dealers, compared to 1,217 in the nine-month period ended June 30, 1998.
The decrease in Contracts purchased is due to the Company's decision to
discontinue its business of purchasing Contracts and to concentrate its business
objectives in the performing and non-performing consumer receivables business.
The Company earned servicing fees of $154,395 for the nine months ended June 30,
1999, as compared to $354,905 for the nine-month period ended June 30, 1998. The
decrease in servicing fees is due to a decrease in the amount of Contracts
serviced for others during the nine-month period ended June 30, 1999, as
compared to the same period in the prior year.

Expenses. During the nine-month period ended June 30, 1999, general and
administrative expense decreased $331,842 compared to the nine months ended June
30, 1998 and represented 44% of total expenses. The decrease in general and
administrative expenses is due a decrease in collection and marketing expenses
associated with the purchasing and servicing of Contracts for the nine month
period ending June 30, 1999, as compared to the same period in the prior year.

Interest expense increased by $1,437,141 during the nine-month period ended June
30, 1999 compared to the same period in the prior year and represented 41% of
total expenses for the nine-month period ended June 30, 1999. The increase is
due to an increase in the outstanding borrowings by the Company under the lines
of credit, notes payable and borrowings from an affiliate.



<PAGE>

                               Asta Funding, Inc.
 Item 2. Management's Discussion and Analysis of Financial Condition and
         Results of Operations


During the nine-month period ended June 30, 1999, the provision for credit
losses on Contracts purchased decreased by $2,020,366 compared to the nine
months ended June 30, 1998 and represented 15% of total expenses. The decrease
in the provision reflects lower volume of Contracts purchased as compared to the
nine months ended June 30, 1998.

Liquidity and Capital Needs

The Company's primary sources of cash from operating activities include borrower
payments on accounts acquired for liquidation, Contracts and base servicing fees
it earns on Contracts sold. The Company's primary uses of cash include its
purchases of accounts acquired for liquidation, Contracts and ordinary operating
expenses and the establishment and buildup of Spread Accounts (defined below).

Net cash used in operating activities was $291,498 during the nine months ended
June 30,1999 compared to net cash provided of $2,130,252 during the nine months
ended June 30, 1998. Cash used for purchasing Contracts was $2.46 million during
the nine months ended June 30, 1999 as compared to $16.8 million in the nine
months ended June 30, 1998. Cash used for purchasing accounts acquired for
liquidation was $53.35 million for the nine months ended June 30, 1999. The
$53.35 million of accounts acquired for liquidation consisted of non-performing
and performing consumer receivables

The Company's cash requirements have been and will continue to be significant.
Pursuant to the terms of a securitization agreement between Greenwich Capital
Markets, Inc. and the Company, the Company is required to make a significant
cash deposit into Spread Accounts, for the purpose of credit enhancement. The
Spread Accounts are pledged to support the related Asset Backed Securities
("ABS"), and are invested in high quality liquid securities. Excess cash flows
from securitized Contracts are deposited into the Spread Accounts until the
Spread Account balances reach a specific percent of the outstanding balance of
the related ABS.

On March 30,1999, AFAI entered into a $9 million term loan and a $1 million
participation agreement with Sterling Financial Services Company in which
Sterling agreed to provide AFAI with a total of $10 million in financing. The
outstanding principal amount of the indebtedness under this facility bears
interest at the prime rate plus 4.25%. At June 30, 1999, the amount outstanding
under this loan aggregated $4,263,282. Also on March 30, 1999, Sterling sold to
Asta Group, Incorporated, an affiliate of the Company a $700,000 undivided
fractional interest in the $1 million participation agreement.

On March 30, 1999, AFAII entered into a term loan with Rosenthal & Rosenthal,
Inc. in which Rosenthal agreed to provide AFAII with $4.5 million in financing.
The outstanding principal amount of the indebtedness under this facility bears
interest at 20% per annum. At June 30, 1999, the amount outstanding under this
loan aggregated $3,088,013. In addition, on March 30, 1999, Asta Group,
Incorporated provided AFAII with $500,000 in financing that bears interest at
20% per annum on the unpaid principal balance.

On March 30, 1999, AFAIII entered into a term loan and a participation agreement
with Greenwich Financial Products, Inc. in which Greenwich agreed to provide
AFAIII with $37,291,500 in financing. The outstanding principal amount of the
indebtedness under this bears interest at LIBOR rate plus 2%. This facility
expires on September 30, 1999. At June 30, 1999 the amount outstanding under
this loan aggregated $24,682,813. Also on March 30, 1999, Asta Group,
Incorporated provided AAFIII with $1 million in financing that bears interest at
12% per annum on the unpaid principal balance.

In January 1998, the Company renewed its credit facility with BankAmerica (the
"Credit Facility") pursuant to which BankAmerica agreed to provide the Company
with a maximum of $20 million. The Credit Facility has a term of two years. The
outstanding principal amount of the indebtedness under the Credit Facility bears
interest at the rate of 1% per annum over BankAmerica's reference rate plus .25%
per annum on the average unused amount of the Credit Facility. Under the Credit
Facility, the Company may borrow up to 83% (the "advance rate") of its net
eligible automobile Contracts (depending upon the trade-in value of the
automobiles securing the Contracts), but in no event more than $20 million. The
advance rate is subject to decreases based on certain loan performance criteria
established by BankAmerica. At June 30, 1999, the Company's advance rate was 75%
of net eligible installment Contracts. On June 30, 1999, at the Company's
request, BankAmerica reduced the maximum amount the of the Credit Facility from
$20 million to $8 million. At June 30, 1999, advances under this facility
aggregated $7,050,000.

In April 1998, RAC entered into demand credit facility with Sterling Financial
Services Company under which RAC can borrow at an advance rate of 65% of
eligible loans up to a maximum of $1 million. At June 30, 1999, advances under
this facility aggregated $106,255. The advances bear interest at the prime rate
plus 4%.


<PAGE>

                               Asta Funding, Inc.
 Item 2. Management's Discussion and Analysis of Financial Condition and
         Results of Operations

The Company anticipates the funds available under its current funding agreements
and credit facilities as well as funds made available by Asta Group,
Incorporated, an affiliate of the Company, and cash from operations will be
sufficient to satisfy the Company's estimated cash requirements for at least the
next 12 months, If for any reason the Company's available cash otherwise proves
to be insufficient to fund operations (because of future changes in the
industry, general economic conditions, unanticipated increases in expenses, or
other factors), the Company may be required to seek additional funding.

The Company anticipates that it will need to incur approximately $200,000 in
capital expenditures during the next 12 months.

Year 2000

The Company recognizes the need to ensure that its operations and systems
(including information technology (IT) and non-IT systems) will not be adversely
impacted by year 2000 hardware and software issues. The Year 2000 problem is the
result of computer programs being written using two digits (rather than four) to
define the applicable years. Any of the Company's programs that have
time-sensitive software may recognize the date using "00" as the year 1900
rather than the year 2000, which could result in miscalculations or system
failures. The Year 2000 problem affects the Company's installed computer
systems, network elements, software applications and other business systems that
have time sensitive programs.

The Company has conducted a review of its IT and non-IT systems to identify
those systems which could be affected by the Year 2000 problem. The Company used
both internal and external sources to identify correct and test its systems for
Year 2000 compliance. Modifications to the Company's systems as a result of the
findings of such assessment were completed and tested by April 30, 1999. The
Company has contacted its Dealers and major vendors to verify that the systems
they use are or will be Year 2000 compliant. Most of the Company's major Dealers
and vendors have advised the Company that they are already Year 2000 compliant
or expect to be Year 2000 in the near future. If the Company's Dealers or others
with whom the Company does business experience problems relating to the Year
2000 issue, the Company's business, financial condition or results of operations
could be materially adversely affected.

As of June 30,  1999,  the Company has spent  approximately  $20,000 on the Year
2000  compliance and does not anticipate any additional  costs  associated  with
Year 2000 compliance.

In the event that efforts of the Company's Year 2000 project did not address all
potential systems problems, the Company is currently developing business
interruption contingency plans. Contingency planning for possible Year 2000
disruptions will continue to be defined, improved and implemented.

The Company believes that its Year 2000 project will allow it to be Year 2000
Compliant in a timely manner. There can be no assurances, however, that the
Company's information technology systems or those of a third party on which the
Company relies will be Year 2000 compliant by year 2000 or that the Company's
contingency plans will mitigate the effects of any noncompliance. An
interruption of the Company's ability to conduct its business due to a Year 2000
readiness problem could have a material adverse effect on the Company's
business, operations or financial condition. The foregoing discussion of the
implications of the Year 2000 problem for the Company contains numerous
forward-looking statements based on inherently uncertain information. There can
be no guarantee that the Company's Year 2000 goals or expense estimates will be
achieved, and actual results could differ.





<PAGE>









                               Asta Funding, Inc.
                            Form 10-QSB June 3, 1999


Part II. OTHER INFORMATION


Item 1.  Legal Proceedings

         As of the date of this filing, the Company was not involved in any
material litigation in which it is the defendant. The Company regularly
initiates legal proceedings as a plaintiff concerning its routine collection
activities.

Item 6.  Exhibits and Reports on Form 8-K

         a. The following exhibits are filed as part of this quarterly report on
form 10-QSB.

              27.1 Financial Data Schedule

         b. No reports on form 8-K were filed by the Company during the quarter
ended June 30, 1999.










<PAGE>

                               Asta Funding, Inc.
                            Form 10-QSB June 30, 1999


Signatures

In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                            ASTA FUNDING, INC.
                                (Registrant)


Date:  August 10, 1999      By:  /s/ Gary Stern
                                -----------------------
                                Gary Stern, President, Chief Executive Officer
                                (Principal Executive Officer)


Date: August 10, 1999       By: /s/ Mitchell Herman
                                -----------------------
                                Mitchell Herman, Chief Financial Officer
                                (Principal Financial Officer and Principal
                                  Accounting Officer)