OUTSOURCING SOLUTIONS INC.
--------------------------

Management Incentive Compensation Plan Description and Payout Guidelines


I.        Purpose

          Outsourcing  Solutions Inc. (the Company) has created this  Management
          Incentive   Compensation  Plan  (Plan)  to  provide  significant  cash
          incentives for executives, managers, and other key personnel to attain
          the  Revenue  and  Company's   EBITDA  or  EBITDA,   after   Portfolio
          Amortization,  if applicable and certain other business  objectives as
          may be  established  by the Chief  Executive  Officer (CEO) and/or the
          Compensation  Committee of the Board of Directors of the Company.  The
          Plan is  intended  to provide  financial  recognition  for the results
          these  individuals  achieve in exercising their judgement,  initiative
          and effort.


II.       Effective Date

          This Plan is  effective  January 1, 2001,  is intended to run annually
          thereafter  concurrent  with the  Company's  fiscal year  (January 1 -
          December  31) and is subject to annual  review /  modification  by the
          Chief Executive Officer.


III.      Participation

          Participation  in the Plan is  limited  to  executives,  managers  and
          equivalent  and  key  professional   personnel.   Each  year,   senior
          management of the Company will  recommend to the CEO the  participants
          for that year.

          Once  eligible,  persons not employed in a  designated  position for a
          full  calendar  year will be  eligible  for  incentive  payments  on a
          prorata basis for their period of participation. During the plan year,
          a person moving into a designated  incentive  position must be in that
          capacity  by  September  30 in order to  receive a  prorata  incentive
          payment for the calendar year.

          An  individual  must be on the  payroll at  December 31 in order to be
          eligible to receive an incentive  payment for that year.  Participants
          who terminate  employment after December 31 but prior to the date when
          payouts are made will not receive an incentive  payment  except at the
          discretion  of the CEO.  Participants  whose  employment is terminated
          during the year as a result of retirement, disability, or death may be
          eligible for a prorata incentive payment and will be at the discretion
          of the CEO.

          An employee is eligible to participate  in only one Company  incentive
          compensation plan at a time. Individuals  participating in commission,
          override, or branch productivity plans are not eligible to participate
          in  this  Plan.   Participants  in  this  Plan  are  not  eligible  to
          participate  in any  other  incentive  plan  nor  given  discretionary
          bonuses throughout the plan year.



IV.       Target Bonus Incentive Compensation Awards

          Target awards represent the percent of base salary at December 31 (end
          of plan year) that would be paid when Consolidated Corporate, Business
          Unit and Individual objectives are completely  fulfilled.  Payout will
          be  done  based  upon  the  attainment  of  the  financial  and  other
          incentives  which will be set  annually  as part of the annual  budget
          cycle.  These  incentives  will  be  reflected  in the  format  on the
          attached  matrices.  Bonuses  payable  pursuant  to this  Plan will be
          calculated (in whole numbers) by determining  the  appropriate  payout
          from the applicable  matrices.  The appropriate  percentage will be an
          absolute percentage from the matrices and will not be an interpolation
          from the matrices.  While these awards will be determined based on the
          actual performance of the company utilizing the attached matrices,  in
          no case will the bonuses exceed 160% of the target.

          In  general,  subject  to the  discretion  of the CEO,  no  corporate,
          leverage,  business unit, or individual bonuses will be paid if actual
          Consolidated Corporate Revenue and EBITDA after Portfolio Amortization
          is less than as indicated on the matrix chart.

          Unbudgeted  acquisition  impact on target performance will be measured
          at a rate of 50% of  incremental  Revenue and EBITDA or EBITDA,  after
          Portfolio  Amortization.  Acquisition impact on targets will generally
          affect  only  the  Consolidated   Corporate   Portion  of  the  award.
          Acquisition  impact  will  affect  the  Business  Unit  targets if the
          acquired entity becomes a part of the Business Unit.


V.        Performance Criteria

          A. Corporate  Criteria:  Represent W percent of total target award and
          will  be   determined  on  the   percentage   attainment  of  approved
          Consolidated  Corporate Revenue and EBITDA less Portfolio Amortization
          objectives as determined annually.

          B. Leverage  Criteria:  Represent X percent  of total target award and
          will be determined on the level of year-end leverage ratio attained.

          C. Business Unit Criteria (SBU & Ind.  Group):  Represent Y percent of
          total target award and will be determined on the percentage attainment
          of approved  business unit Revenue and EBITDA or EBITDA less Portfolio
          Amortization objectives as determined annually.

          D. Individual Criteria:  Represent Z percent of total target award and
          will be determined based on the attainment of individual objectives as
          judged by each  participant's  supervisor  subject to approval  and/or
          adjustment by the CEO.  Individual  objectives will be weighted,  with
          the total  weight equal to 100% of the  individual  portion (Z) of the
          total target award.

          E. Objective  Mix:  Target  awards  will be  determined  based upon an
          appropriate  mix  of  Corporate,   Leverage,   Business   Unit(s)  and
          Individual  objectives  as approved by the CEO. The mix of  objectives
          should  consider  the  nature  and  direct   financial  impact  of  an
          individual's  responsibilities as they relate to the overall financial
          results of the Company.  Performance  criteria mix will be represented
          in whole number  percentages and must total 100%. No more than 50% can
          be placed in the Individual  criteria  unless  approved by the CEO. In
          the majority of cases,  criteria mix should be  consistent  among like
          jobs.

          F. Computation Examples:

             Assume:  SBU Mgmt  eligible for 20% target  based on 10% Corporate,
             10%, Leverage, 60%, Business unit and 20% Individual:

             Base Salary:                             $80,000
             Target Award:                            20% of base or $16,000
                  Corporate portion:                  10% of $16,000 or $1,600
                  Leverage portion:                   10% of $16,000 or $1,600
                  Business unit portion:              60% of $16,000 or $9,600
                  Individual portion:                 20% of $16,000 or $3,200
             Minimum award:                           0%
             Maximum award:                           $25,600

             1. Performance  Situation #1:
                --------------------------
                Corporate  performance 85%
                  of plan,payout (85% x1,600):                        $  1,360
                Leverage  performance  80%
                  of plan,payout (80% x 1,600):                       $  1,280
                Business unit  performance 100%
                  of plan,  payout  (100% x  9,600):                  $  9,600
                Individual  performance judged  110%
                  of plan,  payout  (110% x 3,200):                   $  3,520
                                                                      --------
                                                                      $ 15,760

             2. Performance Situation #2:
                -------------------------
                Corporate performance 115%
                  of plan, payout (115% x1,600):                      $  1,840
                Leverage performance 100%
                  of plan, payout (100% x 1,600):                     $  1,600
                Business unit performance 100%
                  of plan, payout (100% x 9,600):                     $  9,600
                Individual performance judged 85%
                  of plan, payout (85% x 3,200):                      $  2,720
                                                                      --------
                                                                      $ 15,760

             3. Performance Situation #3:
                -------------------------
                Corporate performance 100%
                  of plan, payout (100% x 1,600):                     $  1,600
                Leverage performance 120%
                  of plan, payout (120% x 1,600):                     $  1,920
                Business unit performance 85%
                  of plan, payout (85% x 9,600):                      $  8,160
                Individual performance judged 70%
                  of plan, payout (70% x 3,200):                      $  2,240
                                                                      --------
                                                                      $ 13,920


VI.       Bonus Incentive Compensation Pool

          A Bonus Incentive  Compensation Pool will be accrued annually and will
          be allocated among  participants  based on a combination of corporate,
          leverage,  business unit, and individual performance.  The size of the
          pool will be  determined  annually  based on Company and Business Unit
          performance  against targets and the base salaries of the participants
          of the Plan.


VII.      Plan Administration

          Participation: In December of each year Management will compile a list
          of all  employees  eligible for the  following  year and a recommended
          performance  criteria  mix for  each  and  submit  it for  review  and
          approval by the CEO.

          Changes to Performance Criteria Mix: Changes to an individual's Target
          % of Base or  Performance  Criteria Mix must have prior  approval from
          the appropriate Senior Executive and CEO.

          Payouts:  Payouts will be made in a single lump sum by March 31 of the
          year following the year in which bonuses were earned.  Tax regulations
          (e.g. federal,  state,  county,  local) for lump sum distribution will
          apply.


VIII.     Management Rights

          This Plan replaces the 2000  Management  Incentive  Plan.  Outsourcing
          Solutions  Inc.  reserves  the  right to  alter,  amend,  suspend,  or
          terminate this Plan prospectively (and any other variable compensation
          plan) at any time without notice and without any future liability.

          Designation  of job  classification,  salary  grade,  or an individual
          neither  guarantees  the  individual a right to a bonus nor a right to
          continued employment.  The payout guidelines and formulas described in
          Section  V  herein,  as well as  actual  payouts  recommended,  may be
          adjusted,   modified,  revised  or  eliminated  at  any  time  at  the
          discretion  of  the  CEO  subject  to  approval  of  the  Compensation
          Committee of the Board of Directors.

          An  employee  who is  included  in  this  Plan  may be  given  certain
          individual  performance  objectives to achieve in order to qualify for
          any  bonus  payment.  Such  objectives,  and the  standards  by  which
          achievement  is  measured,  may  vary  from  job-to-job,  and  will be
          determined  early each calendar year through  discussions  between the
          employee's  supervisor  and the employee,  and must be approved by the
          supervisor's  supervisor.  Approved individual  performance objectives
          must be submitted in writing to the CEO for approval no later than the
          later  of (i)  March  31 or  (ii)  30  days  following  the  date  the
          participant  is selected to  participate  in the Plan of the  calendar
          year for which they apply. Such individual  performance objectives may
          be reviewed  and  modified by meeting and  co-signed  agreement of the
          employee and the employee's supervisor at any time during the calendar
          year.