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       June 30, 2000
                                  -------------------

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                                               June 30, 2000
---------------------------------                                  -------------
Voting common stock                                                 6,024,428.07
Non-voting common stock                                               480,321.30
                                                                   -------------
                                                                    6,504,749.37
                                                                   =============

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 June 30, 2000
           (unaudited) and December 31, 1999.................................  3

           Condensed Consolidated Statements of Operations for
           the three and six months ended June 30, 2000
           (unaudited) and 1999 (unaudited)..................................  4

           Condensed  Consolidated  Statements of Cash Flows for
           the six months ended June 30, 2000 (unaudited )and
           1999 (unaudited)..................................................  5

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

   Item 2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations...............................  8

   Item 3. Quantitative and Qualitative Disclosures About Market Risk........ 11

Part II. Other Information................................................... 12

<PAGE>

PAGE 3

OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)
--------------------------------------------------------------------------------


                                                         June 30,   December 31,
                                                          2000          1999
                                                        Unaudited     Audited
                                                      ------------  ------------
ASSETS

Cash and cash equivalents                               $  10,601     $   6,059

Cash and cash equivalents held for clients                 26,167        22,521

Accounts receivable - trade, less allowance for            55,864        52,082
  doubtful receivables of  $559 and $529

Purchased loans and accounts receivable portfolios         30,490        39,947

Property and equipment, net                                44,491        43,647

Intangible assets, net                                    404,099       410,471

Deferred financing costs, less accumulated                 25,017        27,224
  amortization of $2,456 and $248

Other assets                                               27,401        22,761
                                                          --------     --------
        TOTAL                                           $ 624,130     $ 624,712
                                                          ========     ========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts payable - trade                                $   8,979     $   6,801

Collections due to clients                                 26,167        22,521

Accrued salaries, wages and benefits                       12,981        17,009

Debt                                                      525,602       518,307

Other liabilities                                          66,834        68,306

Commitments and contingencies                                   -             -

Mandatorily redeemable preferred stock; redemption         94,323        85,716
  amount of $115,243 and $107,877

Stockholders' deficit:
  Voting common stock; $.01 par value; authorized
    15,000,000 shares, 9,102,677.14 shares issued              91            90
  Non-voting common stock; $.01 par value; authorized
    2,000,000 shares, 480,321.30 issued and outstanding         5             5
  Paid-in capital                                         198,138       196,339
  Retained deficit                                       (172,715)     (155,525)
                                                          --------     --------
                                                           25,519        40,909
  Notes receivable from management for shares sold         (1,418)            -
  Common stock in treasury, at cost; 3,078,249.07 shares (134,857)     (134,857)
                                                          --------     --------
    Total stockholders' deficit                          (110,756)      (93,948)
                                                          --------     --------
       TOTAL                                            $ 624,130     $ 624,712
                                                          ========     ========




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

<PAGE>

PAGE 4

OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands)

                                             Three Months         Six Months
                                            Ended June 30,      Ended June 30,
                                         ------------------  ------------------
                                           2000      1999      2000      1999

REVENUES                                $ 137,373 $ 127,829 $ 270,623 $ 257,076

EXPENSES:
    Salaries and benefits                  66,411    61,427   132,417    22,162
    Service fees and other operating       43,414    39,482    85,011    79,894
      and administrative expenses
    Amortization of purchased loans and
      accounts receivable portfolios        8,109     9,177    14,785    20,477
    Amortization of goodwill and other
      intangibles                           3,979     4,102     7,949     8,204
    Depreciation expense                    4,098     3,614     8,111     7,225
    Nonrecurring realignment and
      relocation expenses                   1,000         -     1,000         -
    Compensation expense related to
      redemption of stock options             187         -       187         -
                                         --------  --------  --------  --------
           Total expenses                 127,198   117,802   249,460   237,962
                                         --------  --------  --------  --------

OPERATING INCOME                           10,175    10,027    21,163    19,114

OTHER EXPENSE                                   -         -         -        76

INTEREST EXPENSE - Net                     15,209    12,644    29,452    25,209
                                         --------  --------  --------  --------
LOSS BEFORE INCOME TAXES                   (5,034)   (2,617)   (8,289)   (6,171)

PROVISION FOR INCOME TAXES                    169       375       294       375
                                         --------  --------  --------  --------
NET LOSS                                   (5,203)   (2,992)   (8,583)   (6,546)

PREFERRED STOCK DIVIDEND REQUIREMENTS
  AND ACCRETION OF SENIOR PREFERRED
  STOCK                                     4,364         -     8,607       506
                                         --------  --------  --------  --------

NET LOSS TO COMMON STOCKHOLDERS         $  (9,567)$  (2,992)$ (17,190)$  (7,052)
                                         ========  ========  ========  ========



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

<PAGE>

PAGE 5

OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

                                                              Six Months Ended
                                                                  June 30,
                                                            --------------------
                                                               2000      1999

OPERATING ACTIVITIES AND PORTFOLIO PURCHASING:
  Net loss                                                  $ (8,583)  $ (6,546)
  Adjustments to reconcile net loss to net cash
    from operating activities and portfolio purchasing:
   Depreciation and amortization                              18,268     16,943
   Amortization of purchased loans and accounts               14,785     20,477
     receivable portfolios
   Change in assets and liabilities:
     Purchases of loans and accounts receivable portfolios    (5,328)    (4,088)
     Accounts receivable and other assets                     (8,242)    (4,978)
     Accounts payable, accrued expenses and other
       liabilities                                            (3,322)    (8,378)
                                                             -------    -------
      Net cash from operating activities and
        portfolio purchasing                                   7,578     13,430
                                                             -------    -------
INVESTING ACTIVITIES:
  Acquisition of property and equipment                       (8,955)    (7,260)
  Purchases of loans and accounts receivable
    portfolios for resale to FINCO                           (54,306)   (29,324)
  Sales of loans and accounts receivable
    portfolios to FINCO                                       54,306     29,324
  Other                                                       (1,577)      (559)
                                                             -------    -------
        Net cash from investing activities                   (10,532)    (7,819)
                                                             -------    -------
FINANCING ACTIVITIES:
  Borrowings under revolving credit agreement                174,650    134,250
  Repayments under revolving credit agreement               (165,650)  (133,050)
  Repayments of debt                                          (1,705)    (8,488)
  Proceeds from issuance of common stock                         201          -
  Deferred financing fees                                          -       (248)
                                                             -------    -------

        Net cash from financing activitie                     7,496     (7,536)
                                                             -------    -------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS           4,542     (1,925)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                 6,059      8,814
                                                             -------    -------

CASH AND CASH EQUIVALENTS, END OF PERIOD                    $ 10,601   $  6,889
                                                             =======    =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during period for interest                      $ 27,621   $ 23,927
                                                             =======    =======
  Net cash paid (received) during period for taxes          $    181   $    (39)
                                                             =======    =======

SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION:
  Paid preferred stock dividends through issuance
    of preferred stock                                      $      -   $    992
                                                             =======    =======
  Accrued dividends on mandatorily redeemable
    preferred stock                                         $  7,366   $      -
                                                             =======    =======
  Accretion of mandatorily redeemable preferred stock       $  1,241   $      -
                                                             =======    =======
  Notes receivable for common stock                         $  1,400   $      -
                                                             =======    =======



               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 and six months  ended June 30,
2000 are not necessarily  indicative of the results that may be expected for the
year ended December 31, 2000. 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, 1999.

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

NOTE 2.  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 acquisition
of The Union  Corporation,  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 June
30, 2000.

NOTE 3.  PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS FINANCING

OSI Funding LLC ("FINCO") is a special-purpose  finance company with the Company
owning approximately 78% of the financial interest but having only approximately
29% of the voting rights.

The following  summarizes the transactions between the Company and FINCO for the
periods ended June 30:

                                             Three Months         Six Months
                                            Ended June 30,       Ended June 30,
                                           ----------------    -----------------
                                            2000     1999       2000     1999
Sales of purchased loans and accounts
  receivable portfolios by the
  Company to FINCO                         $37,782  $11,666    $54,306  $29,324
Servicing fees paid by FINCO to             $5,032   $4,002     $9,337   $5,845
  the Company

Sales of purchased loans and accounts receivable  portfolios  ("Receivables") 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.  In
conjunction with sales of Receivables to FINCO and the servicing agreement,  the
Company  recorded  servicing assets which are being amortized over the servicing
agreement.  The carrying  value of such  servicing  assets is $2,450 at June 30,
2000 and was $1,300 at December 31, 1999.

At June 30, 2000 and December 31, 1999,  FINCO had  unamortized  Receivables  of
$77,548 and $42,967, respectively. At June 30, 2000 and December 31, 1999, FINCO
had  outstanding  borrowings  of $64,766 and  $32,051,  respectively,  under its
revolving warehouse financing arrangement.

NOTE 4:  STOCKHOLDERS' DEFICIT

In the quarter ended June 30, 2000, the Company issued  40,032.03  shares of its
voting  common stock at prices  approximating  fair value to certain  members of
senior management in exchange for cash and interest bearing notes secured by the
shares along with certain  personal assets of the members of senior  management.
The outstanding principal balances plus accrued interest of these notes amounted
to $1,418 at June 30, 2000 and are  classified  as a reduction of  stockholders'
deficit.  In addition,  the Company sold 8,007 shares of its voting common stock
at prices approximating fair value to certain directors of the Company.

NOTE 5:  NONRECURRING EXPENSES

In continuing the adopted strategy to align the Company along business  services
and  establish  call  centers of  excellence,  the  Company  incurred  $1,000 of
nonrecurring  realignment and relocation expenses in the three months ended June
30, 2000.  These expenses  include costs  resulting from closure of certain call
centers,  severance  associated  with these office  closures  and certain  other
one-time costs.

<PAGE>

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

Results of Operations

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999
-----------------------------------------------------------------------------

Revenues for the three months ended June 30, 2000 were $137.4  million  compared
to $127.8  million  in the same  period  last year - an  increase  of 7.5%.  The
revenue  increase of $9.6 million was due to increased  collection,  outsourcing
and portfolio  services revenues.  Revenues from collection  services were $95.7
million for the three  months ended June 30, 2000  compared to $93.0  million in
the comparable  period in 1999. The increase in collection  services revenue was
primarily  attributable  to increased  government  and letter  series  business.
Partially  offsetting  this increase, however,  was a continued  weakness in the
bankcard market,  primarily driven by changes in the portfolio sales market. The
outsourcing  services  revenue  of $18.1  million  compared  favorably  to $14.5
million  in 1999  due to  increased  revenue  from  new and  existing  business.
Revenues from portfolio  services increased 16.3% to $23.6 million for the three
months ended June 30, 2000 from $20.3 million for the comparable period in 1999.
The  increased  revenue  was  due to  higher  servicing  fee  revenues  for  the
off-balance  sheet collections of FINCO portfolios and higher strategic sales of
portfolios  partially  offset by lower revenues from on-balance sheet portfolios
resulting in the shift from  on-balance  sheet  ownership of purchased loans and
accounts  receivable  portfolios to off-balance  sheet.  During the three months
ended June 30, 2000, the Company  recorded  revenue from FINCO servicing fees of
$5.0 million on total collections of $14.3 million compared to servicing fees of
$4.0 million on total  collections  of $10.0  million for the three months ended
June 30, 1999.

Operating expenses,  inclusive of salaries and benefits,  service fees and other
operating and administrative  expenses, were $109.8 million for the three months
ended June 30, 2000 and $100.9  million for the  comparable  period in 1999 - an
increase of 8.8%. The increase in these operating  expenses  resulted  primarily
from higher  collection-related  expenses associated with the increased revenues
of  collection  and  outsourcing  services  and  increased  collection  expenses
associated  with  collections of on and off-balance  sheet purchased  portfolios
partially offset by lower consulting  expenses.  For the three months ended June
30, 2000, amortization and depreciation charges of $16.2 million were lower than
the $16.9 million for the comparable  period in 1999 by $0.7 million.  The lower
amortization  and depreciation  charges resulted  primarily from lower portfolio
amortization as a result of the shift towards  off-balance sheet purchased loans
and accounts receivable portfolios.

In continuing with the strategy to align the Company along business services and
establish call centers of excellence by industry specialization adopted in early
1999, the Company incurred  nonrecurring  realignment and relocation expenses of
$1.0 million which includes costs for closure of certain call centers, severance
associated with these office  closures and certain other one-time  costs.  These
costs were recognized as incurred in 2000.

In the three months ended June 30, 2000, the Company incurred approximately $0.2
million of additional  compensation  expense  resulting  from the  redemption of
vested stock options.

Earnings before interest expense, taxes,  depreciation and amortization (EBITDA)
for the three  months  ended June 30,  2000 was $26.4  million.  Adding back the
nonrecurring charges and the additional  compensation  expense,  EBITDA of $27.5
million for the three  months  ended June 30, 2000  compared  favorably to $26.9
million for the same period in 1999.

Operating  income of $10.2  million  for the three  months  ended June 30,  2000
compared favorably to last year's operating income of $10.0 million for the same
period.  Adding back the nonrecurring charges of $1.0 million and the additional
compensation  expense of approximately $0.2 million,  operating income was $11.4
million for the three months ended June 30, 2000  compared to $10.0  million for
the same  period in 1999 - an increase of 14%.  The shift to  off-balance  sheet
ownership of portfolios has negatively  impacted EBITDA as revenue is recognized
for off-balance  sheet  portfolios when servicing fees (a certain  percentage of
collections)  are earned  whereas for  on-balance  sheet  portfolios the Company
recognizes revenue when collections are received. Nevertheless, operating income
has been positively impacted by lower amortization as the Company amortizes only
on-balance sheet portfolios, which have become smaller.

Net interest  expense for the three months ended June 30, 2000 was $15.2 million
compared to $12.6 million for the  comparable  period in 1999.  The increase was
due  primarily  to higher  interest  rates and higher  amortization  of deferred
financing fees.

The  provision  for income  taxes of $0.2  million  was  provided  for state and
foreign income tax obligations, which the Company cannot offset currently by net
operating losses.

Due to the factors  stated  above,  the net loss for the three months ended June
30, 2000 of $5.2 million  compared  unfavorably  to the net loss of $3.0 million
for the three months ended June 30, 1999.

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999
-------------------------------------------------------------------------

Revenues for the six months ended June 30, 2000 were $270.6 million  compared to
$257.1  million in the same period last year - an increase of 5.3%.  The revenue
increase  of $13.5  million was due to  increased  collection,  outsourcing  and
portfolio  services  revenues.  Revenues  from  collection  services were $192.4
million for the six months ended June 30, 2000 compared to $186.8 million in the
comparable  period in 1999 due  primarily  to increased  governement  and letter
series business.  Partially  offsetting this increase, however,  was a continued
weakness in the bankcard  market,  primarily  driven by changes in the portfolio
sales  market.  The  outsourcing  services  revenue  of $35.0  million  compared
favorably  to  $28.4  million  in 1999  due to  increased  revenue  from new and
existing  business.  Revenues from portfolio services increased to $43.2 million
for the six months  ended June 30, 2000 from $41.9  million  for the  comparable
period in 1999. The increased  revenues was due to higher servicing fee revenues
for the off-balance  sheet  collections of FINCO portfolios and higher strategic
sales of portfolios  partially  offset by lower revenues from  on-balance  sheet
portfolios  resulting in the shift from  on-balance  sheet ownership of purchase
loans and accounts  receivable  portfolios to off-balance sheet.  During the six
months ended June 30, 2000, the Company  recorded  revenue from FINCO  servicing
fees of $9.3 million on total collections of $26.2 million compared to servicing
fees of $5.8 million on total  collections  of $14.7  million for the six months
ended June 30, 1999.

Operating expenses,  inclusive of salaries and benefits,  service fees and other
operating and  administrative  expenses,  were $217.4 million for the six months
ended June 30, 2000 and $202.1  million for the  comparable  period in 1999 - an
increase of 7.6%. The increase in these operating  expenses  resulted  primarily
from higher  collection-related  expenses associated with the increased revenues
of  collection  and  outsourcing  services  and  increased  collection  expenses
associated  with  the  increase  in  collections  of on  and  off-balance  sheet
purchased portfolios partially offset by lower consulting expenses.  For the six
months  ended June 30,  2000,  amortization  and  depreciation  charges of $30.8
million  were lower than $35.9  million  for the  comparable  period in 1999 - a
decrease of 14.2%.  The lower  amortization  and  depreciation  charges resulted
primarily  from lower  portfolio  amortization  as a result of the shift towards
off-balance sheet purchased loans and accounts receivable portfolios.

In continuing with the strategy to align the Company along business services and
establish call centers of excellence by industry specialization adopted in early
1999, the Company incurred  nonrecurring  realignment and relocation expenses of
$1.0  million  which  includes  costs for  closures  of  certain  call  centers,
severance  associated  with these  office  closures and certain  other  one-time
costs. These costs were recognized as incurred in 2000.

In the six months ended June 30, 2000, the Company incurred  approximately  $0.2
million of additional  compensation  expense  resulting  from the  redemption of
vested stock options.

Earnings before interest expenses, taxes, depreciation and amortization (EBITDA)
for the six  months  ended  June 30,  2000 was $52.0  million.  Adding  back the
nonrecurring charges and the additional  compensation expense,  EBITDA was $53.2
million for the six months ended June 30, 2000 compared to $55.0 million for the
same period in 1999. The decrease of $1.8 million was primarily  attributable to
the increased  collection  expenses in relation to the revenue reported from the
collections of purchased  portfolios  partially offset by the contribution  from
increased  collection and  outsourcing  services  revenues and lower  consulting
expenses.

While EBITDA was down  slightly due to the  off-balance  sheet  ownership of the
portfolios,  depreciation and amortization also declined  resulting in operating
income of $21.2 million.  Adding back the  nonrecurring  charges of $1.0 million
and the additional compensation expense of approximately $0.2 million, operating
income was $22.4  million  for the six months  ended June 30,  2000  compared to
$19.1 million for the same period in 1999.

Net  interest  expense for the six months  ended June 30, 2000 of $29.5  million
compared  unfavorably to $25.2 million for the same period in 1999 due primarily
to higher interest rates and higher amortization of deferred financing fees.

The  provision  for income  taxes of $0.3  million  was  provided  for state and
foreign income tax obligations, which the Company cannot offset currently by net
operating losses.

Due to the factors stated above,  the net loss for the six months ended June 30,
2000 of $8.6 million  compared  unfavorably  to the net loss of $6.5 million for
the six months ended June 30, 1999.

Financial Condition, Liquidity and Capital Resources

At June 30, 2000,  the Company had cash and cash  equivalents  of $10.6 million.
The Company's  credit  agreement  provides for a $75.0 million  revolving credit
facility,  which  allows  the  Company to borrow for  working  capital,  general
corporate purposes and acquisitions,  subject to certain conditions.  As of June
30, 2000, the Company had $22.0 million  outstanding  under the revolving credit
facility leaving $48.8 million,  after outstanding letters of credit,  available
under the revolving credit facility.

Since  December  31,  1999,  cash and cash  equivalents  increased  $4.5 million
primarily due to cash from operating activities and portfolio purchasing of $7.6
million and net cash from financing activities of $7.5 million offset by the use
of cash of $10.5 million  primarily for capital  expenditures.  The Company also
held $26.2 million of cash for clients in restricted  trust accounts at June 30,
2000.

For the first six months in 2000, the Company made capital  expenditures of $9.0
million  primarily for the replacement and upgrading of equipment,  expansion of
facilities  and expansion and conversion of the Company's  information  services
systems. The Company anticipates capital spending of approximately $18.0 million
during 2000,  which the Company  intends to fund from cash flow from  operations
and if necessary, borrowings under the revolving credit facility.

See Item 3. "Quantitative and Qualitative Disclosures About Market Risk" for the
Company's derivative activities during the quarter ended June 30, 2000.

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 anticipated costs
and outcome of legal proceedings and environmental  liabilities,  (2) statements
regarding  the  Company's  expected  capital  expenditures,  (3) any  statements
preceded  by,  followed  by or that  include  the  word  "believes,"  "expects,"
"anticipates," "intends," "should," "may," or similar expressions; and (4) 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) legal  proceedings,  (8) environmental  investigations  and
clean up efforts,  (9) expected  synergies,  economies of scale and cost savings
from acquisitions by the Company not being fully realized or realized within the
expected  time  frames,  (10)  costs  of  operational  difficulties  related  to
integrating the operations of acquired  companies with the Company's  operations
being greater than expected, (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,  and (12)
factors discussed from time to time in the Company's public filings.

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.

At December 31, 1999 (the most recent completed fiscal year), the Company had no
outstanding   interest  rate  agreements.   Pursuant  to  the  Company's  credit
agreement,  the Company was obligated to secure  interest rate protection in the
nominal amount of $150.0 million by July 2000. In June 2000, the Company entered
into interest rate collared swap agreements with several financial  institutions
for interest rate  protection on the $150.0 million.  Under the agreements,  the
Company pays  floating  three month LIBOR between 5.90% and 8.50% in addition to
the  applicable  margin  as set forth in the  credit  agreement.  In the  event,
however,  the three month LIBOR drops below 5.9%,  the Company would be required
to pay 7.0% plus the  applicable  margin,  until such time the three month LIBOR
rises above 5.90%, at which time the rate returns to a variable rate.

<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, 1999.

Item 2. Changes in Securities

      See Note 4 of the Condensed  Consolidated  Financial  Statements  included
elsewhere herein.

Item 3. Defaults Upon Senior Securities

      None

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

      None

Item 5. Other Information

      None

Item 6. Exhibits and Reports on Form 8-K

      (a). Exhibits

           Exhibit   10.1 Management  Stock   Purchase  Agreement,  Non-recourse
                     Secured   Promissory  Note  and  Management   Stock  Pledge
                     Agreement  dated as of April 19,  2000  between the Company
                     and Timothy Beffa.

           Exhibit   10.2 Management Stock Purchase  Agreement,  Promissory Note
                     and Management Stock Pledge Agreement dated as of April 19,
                     2000 between the Company and Gary Weller.

           Exhibit   10.3 Form of Director Stock Purchase and Option Agreement.

           Exhibit   10.4 Form of Non-Qualified Stock Option Award Agreement [F]

           Exhibit   27 Financial Data Schedule (Unaudited)

      (b). Reports on Form 8-K

           During the quarter, the following report on Form 8-K was filed:

                     Report on Form 8-K filed June 30, 2000

<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/ Gary L. Weller
                                    ------------------------------------
                                    Gary L. Weller
                                    Executive Vice President
                                       and Chief Financial Officer


Date:    August 11, 2000