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, 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                                      June 30, 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>



                               OUTSOURCING SOLUTIONS INC.
                                    AND SUBSIDIARIES



                                TABLE OF CONTENTS


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

            Condensed Consolidated Balance Sheets
            June 30, 1999 (unaudited) and December 31, 1998..............    3


            Condensed Consolidated Statements of Operations for the three
            and six months ended June 30, 1999 and 1998 (unaudited)......    4


            Condensed Consolidated Statements of Cash Flows for the
            six months ended June 30, 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>

                                                          June 30,  December 31,
                                                            1999        1998
                                                         Unaudited     Audited
                                                         ---------  ------------
<S>                                                      <C>          <C>
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                           $  6,889     $  8,814
     Cash and cash equivalents held for clients            25,206       22,372
     Current portion of purchased loans and accounts
       receivable portfolios                               30,202       35,057
     Accounts receivable - trade, less allowance for
       doubtful receivables of $614 and $1,309             45,165       40,724
     Other current assets                                   9,209        8,777
                                                         --------     --------
         Total current assets                             116,671      115,744
PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS          8,902       20,436
PROPERTY AND EQUIPMENT, net                                40,111       40,317
INTANGIBLE ASSETS, net                                    418,452      425,597
DEFERRED FINANCING COSTS, net                              12,307       13,573
OTHER ASSETS                                                2,778        2,824
                                                         --------     --------
TOTAL                                                    $599,221     $618,491
                                                         ========     ========
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
     Accounts payable - trade                            $  8,036     $  7,355
     Collections due to clients                            25,206       22,372
     Accrued salaries, wages and benefits                  13,190       13,274
     Other current liabilities                             46,171       55,071
     Current portion of long-term debt                     18,749       16,877
                                                         --------     --------
         Total current liabilities                        111,352      114,949

LONG-TERM DEBT                                            502,218      511,271

OTHER LONG-TERM LIABILITIES                                21,743       22,303

STOCKHOLDERS' DEFICIT:
     8% nonvoting cumulative redeemable exchangeable
       preferred stock; authorized 1,250,000 and
       1,000,000 shares, respectively; 1,052,745.42
       and 973,322.32 shares, respectively, issued and
       outstanding, at liquidation value of $12.50
       per share                                           13,159       12,167
     Voting common stock; $.01 par value; authorized
       7,500,000 shares, 3,477,126.01 shares issued
       and outstanding                                         35           35
     Class A convertible nonvoting common stock;
       $.01 par value; authorized 7,500,000 shares,
       391,740.58 shares issued and outstanding                 4            4
     Class B convertible nonvoting common stock;
       $.01 par value; authorized 500,000 shares,
       400,000 shares issued and outstanding                    4            4
     Class C convertible nonvoting common stock;
       $.01 par value; authorized 1,500,000 shares,
       1,040,000 shares issued and outstanding                 10           10
     Paid-in capital                                       66,958       66,958
     Retained deficit                                    (116,262)    (109,210)
                                                         --------     --------
         Total stockholders' deficit                      (36,092)     (30,032)
                                                         --------     --------
TOTAL                                                    $599,221     $618,491
                                                         ========     ========



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


PAGE 4

OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                       Three Months Ended      Six Months Ended
                                                                            June 30,              June 30,
                                                                       ------------------      ----------------
                                                                        1999        1998       1999       1998
<S>                                                                   <C>         <C>        <C>        <C>
REVENUES                                                              $127,829    $123,905   $257,076   $238,731

EXPENSES:
     Salaries and benefits                                              61,427      58,601    122,162    113,153
     Service fees and other operating and administrative expenses       39,482      34,317     79,894     69,970
     Amortization of loans and accounts receivable purchased             9,177      13,318     20,477     22,358
     Amortization of goodwill and other intangibles                      4,102       4,048      8,204      7,543
     Depreciation expense                                                3,614       3,350      7,225      6,477
                                                                      --------    --------   --------   --------
         Total expenses                                                117,802     113,634    237,962    219,501
                                                                      --------    --------   --------   --------

OPERATING INCOME                                                        10,027      10,271     19,114     19,230

OTHER EXPENSE                                                                -           -         76          -

INTEREST EXPENSE - Net                                                  12,644      13,166     25,209     24,390
                                                                      --------    --------   --------   --------
LOSS BEFORE INCOME TAXES AND MINORITY INTEREST                          (2,617)     (2,895)    (6,171)    (5,160)

PROVISION FOR INCOME TAXES                                                 375           -        375          -

MINORITY INTEREST                                                            -           -          -        572
                                                                      --------    --------   --------   --------
NET LOSS                                                                (2,992)     (2,895)    (6,546)    (5,732)

PREFERRED STOCK DIVIDEND REQUIREMENTS                                        -         243        506        477
                                                                      --------    --------   --------   --------

NET LOSS TO COMMON STOCKHOLDERS                                       $ (2,992)    $(3,138)   $(7,052)  $ (6,209)
                                                                      ========     ========   ========  ========










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



<PAGE>


PAGE 5


OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands except share amounts)

<TABLE>
<CAPTION>
                                                              Six Months Ended
                                                                  June 30,
                                                            --------------------
                                                              1999       1998
<S>                                                        <C>         <C>
OPERATING ACTIVITIES:
     Net loss                                               $(6,546)   $ (5,732)
     Adjustments to reconcile net loss to net cash
       from operating activities:
         Depreciation and amortization                       16,943      15,400
         Amortization of loans and accounts receivable
           purchased                                         20,477      22,358
         Other                                                   76           -
         Minority interest                                        -         572
         Change in assets and liabilities:
           Other current assets                              (5,054)      6,490
           Accounts payable and other liabilities            (8,378)     (8,411)
                                                            -------    --------
            Net cash from operating activities               17,518      30,677
                                                            -------    --------

INVESTING ACTIVITIES:
     Payments for acquisitions, net of cash acquired           (877)   (167,208)
     Purchase of loans and accounts receivable portfolios    (4,088)    (23,258)
     Acquisition of property and equipment                   (7,260)     (7,145)
     Other                                                      318           -
                                                            -------    --------
            Net cash from investing activities              (11,907)   (197,611)
                                                            -------    --------

FINANCING ACTIVITIES:
     Proceeds from term loans                                     -     225,469
     Borrowings under revolving credit agreement            134,250     116,500
     Repayments under revolving credit agreement           (133,050)   (132,350)
     Repayments of debt                                      (8,488)    (28,121)
     Deferred financing fees                                   (248)     (2,963)
                                                            -------    --------
            Net cash from financing activities               (7,536)    178,535
                                                            -------    --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS         (1,925)     11,601

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                8,814       3,217
                                                            -------    --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                    $ 6,889    $ 14,818
                                                            =======    ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid during period for interest                   $23,927    $ 18,823
                                                            =======    ========
     Net cash received during period for taxes              $    39    $  7,841
                                                            =======    ========

SUPPLEMENTAL  DISCLOSURE OF NONCASH INVESTING AND FINANCING  ACTIVITIES - During
the six months ended June 30, 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.

</TABLE>


<PAGE>


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

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,
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 an  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              For the six months
                          Ended June 30,                  Ended June 30,
                     ----------------------            -------------------
                       1999           1998               1999       1998
                       ----           ----               ----       ----
       Revenues      $127,829      $123,905            $257,076   $246,085
                     ========      ========            ========   ========

       Net loss       $(2,992)      $(2,895)            $(6,546)   $(6,853)
                      =======       =======             =======    =======

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 $1,775.

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 June
30, 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.




<PAGE>


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,  non-recourse  finance company
formed  in  the  fourth  quarter  of 1998, for  the three  and six  months ended
June 30, 1999:
                                             For the Three          For the Six
                                              Months Ended         Months Ended
                                             June 30, 1999         June 30, 1999
                                             -------------         -------------

    Sales of purchased loans and
         accounts receivable Portfolios
         by the Company to FINCO                $11,666               $29,324

    Servicing fees paid by FINCO to
         the Company                             $4,002                $5,845


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 June 30, 1999, FINCO had outstanding borrowings of $28,367.


<PAGE>

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

Results of Operations

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998

Revenues for the three months ended June 30, 1999 were $127.8  million  compared
to $123.9  million  in the same  period  last year - an  increase  of 3.2%.  The
revenue  increase  of $3.9  million  was due to  increased  fee and  outsourcing
services revenue offset partially by lower portfolio services revenue.  Revenues
from fee  services  were $93.0  million for the three months ended June 30, 1999
compared to $91.3 million in the comparable  period in 1998. The increase in fee
revenues was due  to an increase in existing  placements offset by the continued
pressure  on  contingent  fee  rates  in the highly  competitive  business.  The
outsourcing services revenue of $14.5  million compared favorably to  prior year
of $11.2  million  due to  increased  revenue  from new and  existing  business.
Revenues from  purchased portfolio services decreased from $21.4 million for the
three months  ended June 30, 1998  to $20.3 million  for the three  months ended
June 30, 1999. The decreased revenue was due primarily to the negative impact of
OSI  Funding Corp.  ("FINCO") (formed  in  the  fourth  quarter of  1998 for the
purpose  of  acquiring  loans  and  accounts  receivable  portfolios) and  lower
strategic  sales of  on-balance sheet  portfolios.  As a  result of  selling the
majority of  the portfolio  purchases to FINCO,  portfolio  services revenue was
negatively  impacted by $6.3  million as the Company records  only servicing fee
revenue on the FINCO collections of $10.0 million.

Operating  expenses for the three months ended June 30, 1999 were $117.8 million
compared  to  $113.6  million  for the  comparable  period  in  1998.  Operating
expenses,  exclusive  of  amortization  and  depreciation  charges,  were $100.9
million  for the three  months  ended June 30,  1999 and $92.9  million  for the
comparable  period in 1998 - an increase  of 8.6%.  The  increase  in  operating
expenses, exclusive of amortization and depreciation charges, resulted primarily
from higher collection-related  expenses associated with the increased revenues,
infrastructure  costs  as  the Company  aligns fee  services  by  industry,  and
unusually higher advertising  and promotional expenses and increased  consulting
expenses  of  approximately $1.0 million.  Of  the $117.8  million in  operating
expenses  for  the  three  months  ended   June  30,  1999,  $16.9  million  was
attributable to amortization and depreciation charges compared  to $20.7 million
for the same period last year - a decrease of 18.5%.  The lower amortization and
depreciation charges resulted primarily from lower portfolio amortization as the
majority of portfolio purchases were sold to FINCO resulting in lower on-balance
sheet portfolios.

As a result of the above,  the Company's  operating  income of $10.0 million for
the three months ended June 30, 1999 was  slightly  under $10.3  million for the
comparable period in 1998.

Earnings before interest expense, taxes,  depreciation and amortization (EBITDA)
for the three  months  ended June 30, 1999 was $26.9  million  compared to $31.0
million  for  the  same  period  in  1998.  The  decrease  of $4.1  million  was
attributable to the higher  operating expenses of $8.0 million  and the negative
effect of portfolio services revenues offset partially  by the increased revenue
of $10.2 million.

Net interest  expense for the three months ended June 30, 1999 was $12.6 million
compared to $13.2 million for the  comparable  period in 1998.  The decrease was
due to lower indebtedness and interest rates.

The  provision  for income  taxes of $0.4  million was provided for state income
taxes as the Company has income tax obligations in various states.

Due to the factors  stated above, the net  loss for the three  months ended June
30, 1999 of $3.0 million compared  to the net loss of $2.9 million for the three
months ended June 30, 1998.


Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

Revenues for the six months ended June 30, 1999 were $257.1 million  compared to
$238.7  million in the same period last year - an increase of 7.7%.  The revenue
increase of $18.4 million was due primarily to increased  fee,  outsourcing  and
portfolio  services  revenues  of $11.1  million - an increase of 4.7% over last
year, and $7.3 million from the acquisition of Union. Revenues from fee services
were $186.8  million for the six months  ended June 30, 1999  compared to $177.7
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.   The  outsourcing  services  revenue  of  $28.4  million  compared
favorably to prior year of $21.1  million due to increased  revenue from new and
existing business of 26.6% and $1.6 million from the Union acquisition. Revenues
from purchased  portfolio services increased to $41.9 million for the six months
ended June 30, 1999 compared to $39.9  million in 1998 - up 5.1%.  The increased
revenue was  attributable  to strategic  sales of on-balance  sheet  portfolios.
Gross  collections from on-balance sheet and off-balance  sheet receivables were
approximately  $12.2 million  higher than last year.  However,  due to recording
only  a  servicing  fee for  the  off-balance  sheet receivable  collections  of
portfolios sold to FINCO (Company revenue  negatively impacted by  approximately
$9.2 million), revenues from purchased portfolio services excluding the sales of
on-balance sheet portfolios were flat compared to last year.

Operating  expenses for the six months  ended June 30, 1999 were $238.0  million
compared  to  $219.5  million  for the  comparable  period  in  1998.  Operating
expenses,  exclusive  of  amortization  and  depreciation  charges,  were $202.1
million  for the six months  ended  June 30,  1999 and  $183.1  million  for the
comparable  period in 1998 an  increase  of 10.3%.  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,  infrastructure costs as the Company aligns fee services
by industry,  and unusually higher  advertising  and  promotional  expenses  and
increased  consulting  expenses of  approximately $2.0 million.  Of  the  $238.0
million  in  operating  expenses for the six  months ended June 30, 1999,  $35.9
million was  attributable to amortization and  depreciation charges  compared to
$36.4 million  for the same  period last  year - a decrease  of 1.4%.  The lower
amortization  and  depreciation charges resulted primarily from lower on-balance
sheet  portfolio amortization  offset partially by additional  depreciation  and
amortization of goodwill related to the Union acquisition.

As a result  of the  above,  the  Company  generated  operating  income of $19.1
million for the six months ended June 30, 1999 compared to $19.2 million for the
comparable period in 1998.

Earnings before interest expense, taxes,  depreciation and amortization (EBITDA)
for the six  months  ended June 30,  1999 was $55.0  million  compared  to $55.6
million for the same period in 1998. The decrease was primarily  attributable to
the higher  branding and industry  focused  expenses and  the negative effect of
portfolio services revenues.  The  Company's increased revenue was not enough to
offset those expenses and the negative effect of portfolio services revenues.

Net interest  expense for the six months  ended June 30, 1999 was $25.2  million
compared to $24.4 million for the  comparable  period in 1998.  The increase was
primarily  due to the  additional  indebtedness  incurred  to finance  the Union
acquisition.

The  provision  for income  taxes of $0.4  million was provided for state income
taxes as the Company has income tax obligations in various states.

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 six months ended June 30,
1999 of $6.5 million  compared unfavorably to  the net loss of  $5.7 million for
the six months ended June 30, 1998.

Financial Condition, Liquidity and Capital Resources

At June 30, 1999, the Company had cash and cash equivalents of $6.9 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 June
30, 1999, the Company had outstanding  $26.7 million under the revolving  credit
facility leaving $29.5 million,  after outstanding letters of credit,  available
under the revolving credit facility.

Since  December  31,  1998,  cash and cash  equivalents  decreased  $1.9 million
primarily  due to cash  utilized for the net  repayment of debt of $7.3 million,
purchases  of loans and  accounts  receivable  portfolios  of $4.1  million  and
capital  expenditures  of $7.3 million  offset by cash from  operations of $17.5
million.  The Company also held $25.2  million of cash for clients in restricted
trust accounts at June 30, 1999.

For the first six months in 1999, the Company made capital  expenditures of $7.3
million primarily for the replacement and upgrading of equipment  and  expansion
of the Company's information services systems.  The Company anticipates spending
approximately $18.0 million for capital expenditures in 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 September  1999.
Testing is well underway for all systems with  completion  anticipated  to be no
later than September 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 $1.5 to $1.6  million.  To  date,  the  Company  has  expended
approximately  $1.5 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 is currently in the process of 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 October
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 result 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  June 1999, pursuant  to  written  consent of  shareholders of  the Company's
voting common stock, the following persons were elected 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, George E. McCown, Nathan W. Pearson  Jr., and
Jeffrey E. Stiefler.  These consents  were  executed by holders of  1,897,793.01
shares of the Company's voting common stock.

Item 5. Other Information

        None

Item 6. Exhibits and Reports on Form 8-K

        (a). Exhibits

             Exhibit 10.1 Fourth  Amendment  to the Second  Amended and Restated
             Credit Agreement, dated June 30, 1999.

             Exhibit 27 Financial Data Schedule (Unaudited)

        (b). Reports on Form 8-K

             There were no reports on Form 8-K filed for the three-month  period
             ended June 30, 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/   Gary L. Weller
                          ------------------------------------------------------
                          Gary L. Weller
                          Executive Vice President and
                              Chief Financial Officer


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


Date:   August 16, 1999