SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended                  March 31, 1999        
                               -------------------------------------------------

OR

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

For the transition period from                          to  
                               -----------------------      --------------------

                    Commission File Number         333-16867
                                           -------------------------       

                                  Outsourcing Solutions Inc. 
--------------------------------------------------------------------------------
                    (Exact name of registrant as specified in its charter)

            Delaware                                   58-2197161 
------------------------------------     ---------------------------------------
   (State or other jurisdiction of       (I.R.S. Employer Identification Number)
    incorporation or organization)

  390 South Woods Mill Road, Suite 350
         Chesterfield, Missouri                            63017    
----------------------------------------  --------------------------------------
 (Address of principal executive office)                (Zip Code)

Registrant's telephone number, including area code:  (314) 576-0022

Indicate by checkmark whether the registrant: (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
                     Yes     X                                    No      
                         ---------                                    --------- 

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date.
                                                             Outstanding at
                  Class                                      March 31, 1999
------------------------------------------                   --------------
Voting common stock                                           3,477,126.01
Class A convertible nonvoting common stock                      391,740.58
Class B convertible nonvoting common stock                      400,000.00
Class C convertible nonvoting common stock                    1,040,000.00
                                                              ------------
                                                              5,308,866.59
                                                              ============

Transitional Small Disclosure        (check one):   Yes [    ]      No  [  X ]
                              -------                    ----            ----

<PAGE>


PAGE 2


                           OUTSOURCING SOLUTIONS INC.
                                AND SUBSIDIARIES



                                TABLE OF CONTENTS


Part I.    Financial Information                                            Page
                                                                            ----
  Item 1.  Financial Statements

            Condensed Consolidated Balance Sheets
            March 31, 1999 (unaudited) and December 31, 1998.............    3


            Condensed Consolidated Statements of Operations for the
            three months ended March 31, 1999 and 1998 (unaudited).......    4


            Condensed Consolidated Statements of Cash Flows for the 
            three months ended March 31, 1999 and 1998 (unaudited).......    5


            Notes to Condensed Consolidated Financial Statements 
            (unaudited)..................................................    6


  Item 2.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations....................................    9


  Item 3.   Quantitative and Qualitative Disclosures About Market Risk...   12


Part II.    Other Information............................................   13


<PAGE>


PAGE 3

OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                       March 31,  December 31,
                                                         1999        1998
                                                       Unaudited    Audited
                                                       ---------  ------------
<S>                                                    <C>          <C>     
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                         $ 12,414     $  8,814
     Cash and cash equivalents held for clients          29,518       22,372
     Current portion of purchased loans and 
       accounts receivable portfolios                    33,418       35,057
     Accounts receivable - trade, less allowance 
       for doubtful receivables of $1,002 and $1,309     46,724       40,724
     Other current assets                                 9,445        8,777
                                                       --------     --------
         Total current assets                           131,519      115,744

PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS       13,217       20,436

PROPERTY AND EQUIPMENT, net                              39,850       40,317

INTANGIBLE ASSETS, net                                  421,620      425,597

DEFERRED FINANCING COSTS, net                            13,060       13,573

OTHER ASSETS                                              2,785        2,824
                                                       --------     --------
TOTAL                                                  $622,051     $618,491
                                                       ========     ========
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
     Accounts payable - trade                          $  9,242     $  7,355
     Collections due to clients                          29,518       22,372
     Accrued salaries, wages and benefits                14,976       13,274
     Other current liabilities                           54,022       55,071
     Current portion of long-term debt                   17,882       16,877
                                                       --------     --------
         Total current liabilities                      125,640      114,949

LONG-TERM DEBT                                          507,600      511,271

OTHER LONG-TERM LIABILITIES                              21,911       22,303

STOCKHOLDERS' DEFICIT:
     8% nonvoting cumulative redeemable exchangeable     13,159       12,167
       preferred stock; authorized 1,250,000 shares,
       1,052,745.42 and 973,322.32 shares, 
       respectively, issued and outstanding, at 
       liquidation value of $12.50 per share
     Voting common stock; $.01 par value; authorized         35           35
       7,500,000 shares, 3,477,126.01 shares issued
       and outstanding
     Class A convertible nonvoting common stock; $.01         4            4
       par value; authorized 7,500,000 shares, 
       391,740.58 shares issued and outstanding
     Class B convertible nonvoting common stock; $.01         4            4
       par value; authorized 500,000 shares, 400,000
       shares issued and outstanding
     Class C convertible nonvoting common stock; $.01        10           10
       par value; authorized 1,500,000 shares,
       1,040,000 shares issued and outstanding
     Paid-in capital                                     66,958       66,958
     Retained deficit                                  (113,270)    (109,210)
                                                       --------     --------
         Total stockholders' deficit                    (33,100)     (30,032)
                                                       --------     --------
TOTAL                                                  $622,051     $618,491
                                                       ========     ========


     The accompanying notes are an integral part of the unaudited condensed
                       consolidated financial statements.
</TABLE>


<PAGE>

<TABLE>

PAGE 4

OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands)                                                                                  
<CAPTION>

                                                           Three Months Ended
                                                                March 31
                                                           -------------------
                                                             1999       1998
<S>                                                        <C>        <C>     
REVENUES                                                   $129,247   $114,826

EXPENSES:                                                             
     Salaries and benefits                                   60,735     54,552
     Service fees and other operating and                    40,412     35,653
       administrative expenses
     Amortization of loans and accounts receivable           11,300      9,040
       purchased
     Amortization of goodwill and other intangibles           4,102      3,495
     Depreciation expense                                     3,611      3,127
                                                           --------   --------
         Total expenses                                     120,160    105,867
                                                           --------   --------

OPERATING INCOME                                              9,087      8,959

OTHER EXPENSE                                                    76          -

INTEREST EXPENSE - Net                                       12,565     11,224
                                                           --------   --------
LOSS BEFORE INCOME TAXES AND MINORITY INTEREST               (3,554)    (2,265)

INCOME TAX BENEFIT                                                -          -

MINORITY INTEREST                                                 -        572
                                                           --------   --------
NET LOSS                                                     (3,554)    (2,837)

PREFERRED STOCK DIVIDEND REQUIREMENTS                           506        234
                                                           --------   --------
NET LOSS TO COMMON STOCKHOLDERS                            $ (4,060)  $ (3,071)
                                                           ========   ========
</TABLE>







     The accompanying notes are an integral part of the unaudited condensed
                       consolidated financial statements.



<PAGE>


PAGE 15


OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands except share amounts)                                             
<TABLE>
<CAPTION>

                                                             Three Months Ended
                                                                  March 31,
                                                            --------------------
                                                              1999        1998
OPERATING ACTIVITIES:
<S>                                                         <C>        <C>      
     Net loss                                               $(3,554)   $ (2,837)
     Adjustments to reconcile net loss to net 
       cash from operating activities:
          Depreciation and amortization                       8,461       7,286
          Amortization of loans and accounts                 11,300       9,040 
            receivable purchased   
          Other                                                  76           -
          Minority interest                                       -         572
          Change in assets and liabilities:
            Other current assets                             (6,856)       (949)
            Accounts payable and other current liabilities    2,634      (4,309)
                                                            -------    --------
            Net cash from operating activities               12,061       8,803
                                                            -------    --------

INVESTING ACTIVITIES:                                                    
     Payments for acquisitions, net of cash acquired              -    (163,670)
     Purchase of loans and accounts receivable portfolios    (2,442)    (15,574)
     Acquisition of property and equipment                   (3,395)     (2,856)
     Other                                                      374           -
                                                            -------    --------
            Net cash from investing activities               (5,463)   (182,100)
                                                            -------    --------

FINANCING ACTIVITIES:                                                    
     Proceeds from term loans                                     -     225,469
     Borrowings under revolving credit agreement             67,550      73,400
     Repayments under revolving credit agreement            (66,050)    (87,000)
     Repayments of debt                                      (4,263)    (23,918)
     Deferred financing fees                                   (235)     (2,935)
                                                            -------    --------
            Net cash from financing activities               (2,998)    185,016

                                                            -------    --------
NET INCREASE IN CASH AND CASH EQUIVALENTS                     3,600      11,719

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                8,814       3,217
                                                            -------    --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                    $12,414    $ 14,936
                                                            =======    ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                        
     Cash paid during period for interest                   $ 9,346    $  3,319
                                                            =======    ========

     Net cash (received) paid during period for taxes       $   (89)   $     92
                                                            =======    ========
</TABLE>

SUPPLEMENTAL  DISCLOSURE OF NONCASH INVESTING AND FINANCING  ACTIVITIES - During
the three months ended March 31, 1999 and 1998, the Company paid preferred stock
dividends  of $992 and $468,  respectively,  through the  issuance of  79,423.10
shares and 37,435.47 shares of preferred stock, respectively.


     The accompanying notes are an integral part of the unaudited condensed
                       consolidated financial statements.



<PAGE>


OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands)

NOTE 1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the three months ended March 31, 1999 are
not  necessarily  indicative  of the results  that may be expected  for the year
ended  December 31,  1999.  For purposes of  comparability,  certain  prior year
amounts have been reclassified to conform to current quarter presentation. These
Condensed  Consolidated  Financial Statements should be read in conjunction with
the  Consolidated  Financial  Statements  and  notes  thereto  contained  in the
Company's Form 10-K for the year ended December 31, 1998.

Comprehensive  loss for  the periods presented  were equal to  the Company's net
loss as the Company had no comprehensive income (loss) items.


NOTE 2.  ACQUISITION

On January 23, 1998, the Company acquired  through a tender offer  approximately
77% of the outstanding shares of The Union Corporation's  ("Union") common stock
for $31.50 per share.  On March 31, 1998,  the Company  acquired  the  remaining
outstanding shares of Union when Union merged with a wholly-owned  subsidiary of
the  Company.  The  aggregate  purchase  price  of  the  Union  acquisition  was
approximately  $220,000  including  transaction  costs of  $10,900  and  assumed
liabilities.  The Company financed the acquisition primarily with funds provided
by the amended credit  agreement.  Union,  through certain of its  subsidiaries,
furnishes  a broad  range  of  credit  and  receivables  management  outsourcing
services  as well as  management  and  collection  of accounts  receivable.  The
acquisition  was  accounted  for under the purchase  method of  accounting.  The
Company  allocated the total purchase  price  including  additional  liabilities
reserves to the fair value of the net assets  acquired  resulting in goodwill of
approximately  $219,000.  The goodwill will be amortized over 30 years using the
straight-line method.  Union's consolidated operating results have been included
in the Company's  consolidated  results since January 23, 1998,  recognizing the
minority interest through the completion date of the acquisition.

The unaudited proforma consolidated  financial data presented below provides pro
forma effect of the Union  acquisition as if such acquisition had occurred as of
the beginning of each period presented. The unaudited results have been prepared
for  comparative  purposes  only and do not  necessarily  reflect the results of
operations of the Company that actually would have occurred had the  acquisition
been consummated as of the beginning of each period presented, nor does the data
give effect to any transactions other than the acquisition.

                                                      For the three months
                                                        Ended March 31,    
                                                    -------------------------
                                                      1999            1998

                      Revenues                      $129,247        $122,180
                                                    ========        ========

                      Net loss                       $(3,554)        $(3,958)
                                                     =======         =======


NOTE 3.  DEBT

In January 1998, the Company  finalized the Second  Amended and Restated  Credit
Agreement for $466,663 (the "Agreement") with a group of banks to fund the Union
acquisition and refinance existing outstanding  indebtedness.  The Agreement, as
amended,  consists  of a $408,663  term loan  facility  and a $58,000  Revolving
Credit Facility (the "Revolving Facility"). The term loan facility consists of a
term loan of $59,187  ("Term Loan A"), a term loan of  $124,476  ("Term Loan B")
and a term loan of $225,000  ("Term Loan C"),  which mature on October 15, 2001,
2003 and 2004, respectively. The Company is required to make quarterly principal
repayments  on each term  loan.  Term Loan A bears  interest,  at the  Company's
option,  (a) at a base rate equal to the greater of the federal  funds rate plus
0.5% or the  lender's  customary  base  rate  plus  1.5%  or (b) at the  reserve
adjusted  Eurodollar  rate plus 2.5%. Term Loan B and Term Loan C bear interest,
at the Company's option,  (a) at a base rate equal to the greater of the federal
funds rate plus 0.5% or the lender's  customary  base rate,  plus 2.0% or (b) at
the reserve adjusted Eurodollar rate plus 3.0%.

The  Revolving  Facility  originally  had a term  of  five  years  and is  fully
revolving until October 15, 2001. The Revolving Facility bears interest,  at the
Company's  option,  (a) at a base rate equal to the greater of the federal funds
rate  plus  0.5% or the  lender's  customary  base  rate plus 1.5% or (b) at the
reserve  adjusted  Eurodollar  rate  plus  2.5%.  Also,  outstanding  under  the
Revolving Facility are letters of credit of $1,656.

The  Agreement  is  guaranteed  by  all  of  the  Company's   present   domestic
subsidiaries  and  is  secured  by all of the  stock  of the  Company's  present
domestic  subsidiaries  and  by  substantially  all of  the  Company's  domestic
property assets.  The Agreement  contains certain covenants the more significant
of which limit dividends, asset sales, acquisitions and additional indebtedness,
as well as requires the Company to satisfy certain financial performance ratios.


NOTE 4.  LITIGATION

From time to time,  the Company and certain of its  subsidiaries  are subject to
various  investigations,  claims and legal proceedings  covering a wide range of
matters  that  arise in the normal  course of  business  and are  routine to the
nature  of the  Company's  businesses.  In  addition,  as a result  of the Union
acquisition, certain subsidiaries of the Company are a party to several on-going
environmental  remediation  investigations  by  federal  and state  governmental
agencies  and  clean-ups  and,  along  with  other  companies,  has been named a
"potentially  responsible  party" for certain waste  disposal  sites.  While the
results of  litigation  cannot be  predicted  with  certainty,  the  Company has
provided for the  estimated  uninsured  amounts and costs to resolve the pending
suits and management, in consultation with legal counsel, believes that reserves
established for the ultimate resolution of pending matters are adequate at March
31, 1999.


NOTE 5.  8% NONVOTING CUMULATIVE REDEEMABLE EXCHANGEABLE PREFERRED STOCK

In January 1999, the Company  increased its  authorized 8% Nonvoting  Cumulative
Redeemable  Exchangeable  Preferred  Stock from  1,000,000  shares to  1,250,000
shares.








NOTE 6.  PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS FINANCING

The following  summarizes the  transactions  between the Company and OSI Funding
Corp.  ("FINCO"),  a qualifying  special-purpose  finance  company formed in the
fourth quarter of 1998, for the three months ended March 31, 1999:

               Sales of purchased loans and accounts receivable
                 portfolios by the Company to FINCO                  $17,658

               Servicing fees paid by FINCO to the Company            $1,843

Sales of purchased  loans and accounts  receivable  portfolios by the Company to
FINCO were in the same amount and occurred  shortly after such  portfolios  were
acquired by the Company from the various unrelated sellers. Accordingly, no gain
or loss was recorded by the Company on the sales to FINCO.

At March 31, 1999, FINCO had outstanding borrowings of $22,380.


NOTE 7.  NEW ACCOUNTING PRONOUNCEMENT

In January 1999, the Company adopted Statement of Position No. 98-1,  Accounting
for Costs of Computer  Systems  Developed or Obtained for  Internal  Use,  ("SOP
98-1"),  which is effective for fiscal years beginning  after December 15, 1998.
The  adoption  of SOP 98-1 did not have a  material  impact on the  consolidated
statement of operations and consolidated balance sheet for the quarter ended and
at March 31, 1999.



<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Results of Operations

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998

Revenues for the three months ended March 31, 1999 were $129.2 million  compared
to $114.8  million in the same  period  last year - an  increase  of 12.6%.  The
revenue   increase  of  $14.4  million  was  due  primarily  to  increased  fee,
outsourcing  and  portfolio  services  revenues of $7.1 million - an increase of
6.2% over last year, and $7.3 million from the  acquisition  of Union.  Revenues
from fee services  were $93.7  million for the three months ended March 31, 1999
compared to $86.4 million in the comparable  period in 1998. The increase in fee
revenues was due to a 1.9%  increase in existing  business and $5.7 million from
the Union acquisition.  Revenues from purchased portfolio  services increased to
$21.7  million  for the three  months  ended  March 31,  1999  compared to $18.5
million in 1998 - up 16.7%. The increased  revenue was attributable to strategic
sales of on-balance sheet portfolios. Revenues from purchased portfolio services
excluding the sales of on-balance sheet portfolios were flat with last year  due
to  slightly lower  collections of  on-balance  sheet  portfolios  offset by the
servicing  fee  revenue on the  FINCO (formed  in the  fourth  quarter of  1998)
collections of $4.7 million.  The outsourcing services revenue  of $13.8 million
compared favorably to prior year of  $9.9 million due  to increased revenue from
existing business of 23.0% and $1.6 million from the Union acquisition.

Operating expenses for the three months ended March 31, 1999 were $120.1 million
compared  to  $105.9  million  for the  comparable  period  in  1998.  Operating
expenses,  exclusive  of  amortization  and  depreciation  charges,  were $101.1
million for the three  months  ended  March 31,  1999 and $90.2  million for the
comparable  period in 1998 - an increase  of 12.1%.  The  increase in  operating
expenses, exclusive of amortization and depreciation charges, resulted primarily
from the Union acquisition,  higher collection-related  expenses associated with
the increased revenues and increased consulting expenses.  Of the $120.1 million
in operating  expenses for the three months ended March 31, 1999,  $19.0 million
was  attributable to amortization  and  depreciation  charges  compared to $15.7
million  for the same  period  last  year - an  increase  of 21.4%.  The  higher
amortization and depreciation charges resulted from additional  depreciation and
amortization  of  goodwill  related  to  the  Union  acquisition  and  increased
portfolio  amortization  resulting  from  increased  portfolio  sales of certain
on-balance sheet portfolios.

As a result of the above, the Company generated operating income of $9.1 million
for the three  months  ended  March 31, 1999  compared  to $9.0  million for the
comparable period in 1998.

Earnings before interest expense, taxes,  depreciation and amortization (EBITDA)
for the three  months ended March 31, 1999 was $28.1  million  compared to $24.6
million for the same period in 1998.  The increase of $3.5 million  consisted of
$0.7  million  as a result  of the Union  acquisition  with the  remaining  $2.8
million  primarily  attributable to the increased revenue from existing business
of $7.1 million.

Net interest expense for the three months ended March 31, 1999 was $12.6 million
compared to $11.2 million for the  comparable  period in 1998.  The increase was
due  to  additional  indebtedness  incurred  to  finance  the Union acquisition.

Consistent with management's  assessment made in the fourth quarter of 1997, the
potential tax benefits  generated by additional net operating loss carryovers or
the future  reversal of the net deductible  temporary  differences for the three
months  ended  March 31,  1999 and 1998  were  fully  offset by a net  valuation
allowance of $1.4 million and $0.9 million, respectively.

Minority  interest in 1998 resulted from the Union  acquisition.  On January 23,
1998, the Company acquired  approximately 77% of the outstanding common stock of
Union  through a tender offer.  The  acquisition  of all  remaining  outstanding
common stock of Union was  completed on March 31, 1998.  The Company  recognized
minority  interest in earnings of Union  during the period from January 23, 1998
to March 31, 1998.

Due to the factors  stated above,  the net loss for the three months ended March
31, 1999 of $3.6 million  compared  unfavorably  to the net loss of $2.8 million
for the three months ended March 31, 1998.

Financial Condition, Liquidity and Capital Resources

At March 31, 1999,  the Company had cash and cash  equivalents of $12.4 million.
The Company's  credit  agreement  provides for a $58.0 million  revolving credit
facility,  which  allows  the  Company to borrow for  working  capital,  general
corporate purposes and acquisitions,  subject to certain conditions. As of March
31, 1999, the Company had outstanding  $27.0 million under the revolving  credit
facility leaving $29.4 million,  after outstanding letters of credit,  available
under the revolving credit facility.

Since  December  31,  1998,  cash and cash  equivalents  increased  $3.6 million
primarily due to cash from operations of $12.1 million offset  primarily by cash
utilized for the net  repayment of debt of $2.8  million, purchases of loans and
accounts receivable portfolios of  $2.4 million and capital expenditures of $3.4
million.  The Company  also held $29.5 million of cash for clients in restricted
trust accounts at March 31, 1999.

For the  first three  months in 1999, the  Company made capital  expenditures of
$3.4 million  primarily  for  the  replacement  and  upgrading of equipment  and
expansion of the Company's information services systems. The Company anticipates
spending approximately $17.5 million for 1999.

Year 2000

As the Year 2000 approaches,  many corporate systems worldwide could malfunction
or  produce   incorrect   results  because  they  cannot  process   date-related
information  properly.  Dates play a key role in dependable  functioning  of the
software applications,  software systems, information technology infrastructure,
and  embedded  technology  (i.e.,  non-technical  assets such as time clocks and
building  services)  the  Company  relies  upon  in  day-to-day  operations  for
innumerable tasks. This includes any tasks requiring  date-dependent  arithmetic
calculations, sorting and sequencing data, and many other functions.

The Company  identified  this  problem as a key focus during 1997 and as part of
any subsequent due-diligence procedures related to acquisitions completed during
1998.  The Company has assessed the impact of Year 2000 issues on the processing
date-related  information  for  all of its  information  systems  infrastructure
(e.g.,  production  systems) and significant  non-technical  assets.  As the new
millennium  approaches,  the Company has developed  and  implemented a Year 2000
program to deal with this  important  issue in an effective  and timely  manner.
This problem has received significant senior management attention and resources.
Management  reviews  have been held on this  topic.  During  1998 and 1999,  the
Company's  Board of Directors  received and will  continue to receive  quarterly
reports at each regular Board meeting  regarding the Company's overall Year 2000
compliance status and readiness.

An  independent  consulting  firm  has  been  retained  to  provide  independent
verification and testing of the production  systems.  Under the direction of the
Company's Senior Vice President and Chief Information  Officer,  the Company has
established a program management structure, a management process and methodology
and proactive  client and vendor  management  strategies to manage the Year 2000
risk.

Because  many  of the  Company's  client  relationships  are  supported  through
computer-system  interfaces,  it is critical that the Company works  proactively
with its clients to achieve Year 2000 compliance.  The Company has established a
proactive  client  management  strategy  focused on enabling the Company to work
together with clients to assure Year 2000 compliance between respective computer
systems.

The implementation of the client management  strategy commenced in 1998. Letters
were sent to significant  clients,  inquiring  about their Year 2000  compliance
plans and status.  The Company has established a follow-up process with each key
client,  taking a proactive,  customer-focused  approach to achieving  Year 2000
compliance with its customers.

The Company has also  communicated  with its  strategic  suppliers and equipment
vendors,  including suppliers of non-technical  assets,  seeking assurances that
they and their products will be Year 2000 ready. The Company's goal is to obtain
as much  detailed  information  as possible  about its  strategic  suppliers and
equipment  vendors' Year 2000 plans to identify those  companies which appear to
pose any significant risk of failure to perform their obligations to the Company
as a result of the Year 2000.  The Company  has  compiled  detailed  information
regarding all of its strategic suppliers and equipment vendors.  This will be an
ongoing process during the Year 2000 project.  For those strategic suppliers and
equipment vendors whose response was not satisfactory, the Company has developed
contingency plans to ensure that sufficient  alternative resources are available
to continue with business operations.

The  target  date for  completion  of all  production  systems  and  significant
non-production systems (e.g.,  predictive dialer systems,  phone switches,  wide
area network hardware), including non-technical assets, is June 1999. Testing is
well underway for all systems with  completion  anticipated  to be no later than
June 1999.

Spending for modifications and updates are being expensed as incurred and is not
to have a material  impact on the results of operations or cash flows.  The cost
of the  Company's  Year 2000 project is being  funded from cash flows  generated
from operations. The Company estimates that its total Year 2000 expenses will be
in the  range  of $1.4 to $1.6  million.  To  date,  the  Company  has  expended
approximately  $1.3 million,  primarily for contract  programmers and consulting
costs  associated  with the  evaluation,  assessment and remediation of computer
systems.

The Company is dependent  upon its own internal  computer  technology and relies
upon the timely  performance of its suppliers and customers and their systems. A
substantial  part of the Company's  day-to-day  operations is dependent on power
and  telecommunications  services, for which alternative sources of services may
be limited.  A large-scale Year 2000 failure could impair the Company's  ability
to provide  timely  performance  results  required by the  Company's  customers,
thereby causing potential liability,  lost revenues and additional expenses, the
amounts which have not been estimated.  The Company's Year 2000 project seeks to
identify  and  minimize   this  risk  and  includes   testing  of  its  in-house
applications,  purchased  software  and hardware to ensure that all such systems
will  function  before  and after the Year  2000.  The  Company  is  continually
refining  its  understanding  of the risk the Year 2000  poses to its  strategic
suppliers and customers  based upon  information  obtained  through its surveys.
This refinement will continue through 1999.

The Company's Year 2000 project  includes the  development of contingency  plans
for business critical systems,  as well as for strategic suppliers and customers
to attempt to minimize  disruption to its operations in the event of a Year 2000
failure.  The Company will be formulating  plans to address a variety of failure
scenarios,  including failures of its in-house applications, as well as failures
of strategic  suppliers  and  customers.  The Company  anticipates  that it will
complete Year 2000 contingency planning by June 1999.

Forward-Looking Statements

The following statements in this document are or may constitute  forward-looking
statements  made in  reliance  upon the safe  harbor of the  Private  Securities
Litigation Reform Act of 1995: (1) statements concerning the cost and successful
implementation of the Company's Year 2000 initiatives, (2) statements concerning
the  anticipated  costs  and  outcome  of legal  proceedings  and  environmental
liabilities,   (3)   statements   regarding  the  Company's   expected   capital
expenditures,  (4) any statements  preceded by,  followed by or that include the
word  "believes,"  "expects,"  "anticipates,"  "intends,"  "should,"  "may,"  or
similar  expressions;  and (5) other  statements  contained or  incorporated  by
reference in this document regarding matters that are not historical facts.

Because such statements are subject to risks and  uncertainties,  actual results
may differ  materially from those  expressed or implied by such  forward-looking
statements.  Factors  that  could  cause  actual  results  to differ  materially
include, but are not limited to: (1) the demand for the Company's services,  (2)
the demand for accounts receivable  management  generally,  (3) general economic
conditions,  (4) changes in interest rates, (5)  competition,  including but not
limited to pricing pressures, (6) changes in governmental regulations including,
but not limited to the federal Fair Debt Collection Practices Act and comparable
state  statutes,  (7) the status and  effectiveness  of the Company's  Year 2000
efforts,  (8) legal proceedings,  (9) environmental  investigations and clean up
efforts,  (10)  the  Company's  ability  to  rationalize  operations  of  recent
acquisitions,  and (11) the  Company's  ability to generate  cash flow or obtain
financing  to fund its  operations,  service its  indebtedness  and continue its
growth and expand successfully into new markets and services.

These forward-looking statements speak only as of the date they were made. These
cautionary  statements  should be considered  in connection  with any written or
oral  forward-looking  statements that the Company may issue in the future.  The
Company does not undertake any  obligation to release  publicly any revisions to
such  forward-looking  statements to reflect later events or circumstances or to
reflect the occurrence of unanticipated events.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to the risk of  fluctuating  interest rates in the normal
course of business.  From time to time and as required by the  Company's  credit
agreement,  the Company will employ derivative financial  instruments as part of
its risk  management  program.  The  Company's  objective is to manage risks and
exposures and not to trade such instruments for profit or loss.

Since December 31, 1998 (the most recent completed fiscal year), there have been
no material changes in the reported market risks.


<PAGE>


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

From time to time, the Company and certain of its  subsidiaries  are involved in
various  investigations,  claims and legal proceedings  covering a wide range of
matters  that  arise in the normal  course of  business  and are  routine to the
nature of the  Company's  business.  Other  information  with  respect  to legal
proceedings  appears in the  Company's  Annual  Report on Form 10-K for the year
ended December 31, 1998.


Item 2. Changes in Securities

        None


Item 3. Defaults Upon Senior Securities

        None


Item 4. Submission of Matters to a Vote of Security Holders

In  January 1999, pursuant to  written consent  of shareholders of the Company's
voting common stock and  preferred  stock, the Company  amended and restated its
certificate of incorporation to increase its authorized 8% Nonvoting  Cumulative
Redeemable  Exchangeable  Preferred  Stock  from  1,000,000  shares to 1,250,000
shares.  These consents were executed by  holders of 2,831,126.01  shares of the
Company's voting common stock and 973,322.32  shares of the Company's  preferred
stock.  Pursuant to the same written consent, the same holders  of the Company's
voting common  stock (1) elected the following  persons to serve as directors of
the  Company  until  the  next annual  meeting  of  shareholders,  such  persons
constituting all directors of the Company:  Timothy G. Beffa, David E. De Leeuw,
David  G. Hanna,  Frank  J. Hanna, III,  Courtney F. Jones,  Robert A. Marshall,
William B. Hewitt,  David E. King,   Nathan W. Pearson, Jr., Jeffrey E. Stiefler
and  Tyler  T. Zachem;   (2)  approved,  ratified  and  adopted  indemnification
agreements by and  between the Company and all persons who serve as directors of
the Company  from time to  time  and such  certain  officers  of the  Company as
specified from time to time  by the Chief  Executive  Officer; and (3) approved,
ratified and adopted all prior acts of the Company's Board of Directors.


Item 5. Other Information

        None


Item 6. Exhibits and Reports on Form 8-K

        (a). Exhibits

             Exhibit 10 Form of Indemnity Agreement, entered into by and between
                        the Company and its directors and certain officers.
             Exhibit 27 Financial Date Schedule (Unaudited)

        (b). Reports on Form 8-K

             There were no reports on Form 8-K filed for the three-month  period
ended March 31, 1999.


<PAGE>




                                       SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                           OUTSOURCING SOLUTIONS INC.
                           (Registrant)



                           /s/   TIMOTHY G. BEFFA
                           -----------------------------------------------------
                           Timothy G. Beffa
                           President and Chief Executive Officer



                           /s/   DANIEL T. PIJUT
                           -----------------------------------------------------
                           Daniel T. Pijut
                           Vice President, Corporate Controller and
                              Chief Accounting Officer




Date:   May 14, 1999