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<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>

<P align="center" style="font-size: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P align="center" style="font-size: 10pt"><B>Date of Report (Date of earliest event reported): December 30, 2008</B>

<P align="center">

<P align="center" style="font-size: 24pt"><B>ASTA FUNDING, INC.<BR></B>
<FONT style="font-size: 10pt">(Exact name of registrant as specified in its charter)
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    <TD style="border-bottom: 1px solid #000000"><B>Delaware</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>0-26906</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>22-3388607</B></TD>
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<TR valign="top">
    <TD>(State or other Jurisdiction of Incorporation)</TD>
    <TD>&nbsp;</TD>
    <TD>(Commission File Number)</TD>
    <TD>&nbsp;</TD>
    <TD>(IRS Employer Identification No.)</TD>
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    <TD width="49%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>210 Sylvan Avenue, Englewood Cliffs, New Jersey<BR></B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>07632</B></TD>
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<TR valign="top">
    <TD>(Address of Principal Executive Offices)</TD>
    <TD>&nbsp;</TD>
    <TD>(Zip Code)</TD>
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<P align="center" style="font-size: 10pt">Registrant&#146;s telephone number, including area code: <B>201-567-5648</B>


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    <TD nowrap>(Former name or former address if changed since last report.)</TD>
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<P align="left" style="font-size: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:

<P align="left" style="font-size: 10pt">
<FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


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<P align="justify" style="font-size: 10pt"><B>Item&nbsp;8.01. Other Events</B>


<P align="justify" style="font-size: 10pt; text-indent: 4%">On March&nbsp;2, 2007 Palisades Acquisition XVI, LLC (&#147;Palisades XVI&#148;), an affiliate of Asta Funding, Inc. (the
&#147;Company&#148;), entered into a Receivables Financing Agreement, as amended on July&nbsp;1, 2007, December&nbsp;27, 2007 and May&nbsp;19,
2008 (as amended, the &#147;Agreement&#148;), with, among other parties, BMO Capital Markets Corp. (&#147;BMO&#148;), as administrative
agent for the lenders thereto, and the Bank of Montreal, as liquidity agent for the liquidity providers thereto from
time to time, pursuant to which Palisades XVI borrowed approximately $227&nbsp;million in order to finance a portion of the
$300&nbsp;million purchase price for a portfolio of approximately $6.9&nbsp;billion in face value receivables. On December&nbsp;1,
2008, as a result of the actual collections being lower than the minimum collection rates required under the Agreement
for the month ended November&nbsp;30, 2008, a termination event occurred under the Agreement. In order to address this
issue, the parties to the Agreement executed a Waiver (the &#147;Waiver&#148;) dated as of December&nbsp;1, 2008. The Waiver provided
that, among other things, the termination event would be waived until December&nbsp;22, 2008, which was later extended to
December&nbsp;31, 2008 and further extended until January&nbsp;14, 2009.


<P align="justify" style="font-size: 10pt; text-indent: 4%">In connection with the Waiver, Palisades XVI and BMO continue to negotiate a fourth amendment (the &#147;Fourth
Amendment&#148;) to the Receivables Financing Agreement, which would, among other things, lower the minimum collection rate
and, under certain circumstances, extend the maturity date. In connection with the proposed Fourth Amendment, the
Company is negotiating limited credit support (representing less than 2&nbsp;percent of its total assets) for the benefit of
BMO, and an intercreditor agreement (the &#147;Intercreditor Agreement&#148;). This arrangement will require the consent of the
consortium of banks that provide the Company&#146;s existing line of credit under the Fourth Amended and Restated Loan
Agreement (the &#147;Credit Agreement&#148;). In connection with obtaining such consent, the Company is also discussing other
amendments, including amending certain provisions of the Credit Agreement (the &#147;Credit Agreement Amendment&#148;) to reduce
the maximum availability and amend certain financial covenants of the Credit Agreement. There can be no assurance the
Company will be able to negotiate any or all of the Fourth Amendment, the Intercreditor Agreement or the Credit
Agreement Amendment and related documents, or that the terms of any such documents will be favorable to the Company.


<P align="justify" style="font-size: 10pt; text-indent: 4%">As senior management has been engaged in negotiating the Fourth Amendment, the Intercreditor Agreement, the Credit
Agreement Amendment and related documents, the Company is unable to file its annual report on Form 10-K for the year
ended September&nbsp;30, 2008.


<P align="justify" style="font-size: 10pt; text-indent: 4%">The Company does anticipate filing its Form 10-K for the fiscal year ended September&nbsp;30, 2008 within the next 15
days.

<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt; display: none">2
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<P align="center" style="font-size: 10pt"><B>SIGNATURE</B>



<P align="justify" style="font-size: 10pt; text-indent: 4%">Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

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    <TD nowrap align="left" colspan="3"><B>ASTA FUNDING, INC.</B><BR></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: <u>December&nbsp;31, 2008</u>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Mitchell Cohen</TD>
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</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mitchell Cohen</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
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Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 2008
ASTA FUNDING, INC.
(Exact name of registrant as specified in its charter)
Delaware
0-26906
22-3388607
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
210 Sylvan Avenue, Englewood Cliffs, New Jersey
07632
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code:
201-567-5648
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events
On March 2, 2007 Palisades Acquisition XVI, LLC ("Palisades XVI"), an affiliate of Asta Funding, Inc. (the
"Company"), entered into a Receivables Financing Agreement, as amended on July 1, 2007, December 27, 2007 and May 19,
2008 (as amended, the "Agreement"), with, among other parties, BMO Capital Markets Corp. ("BMO"), as administrative
agent for the lenders thereto, and the Bank of Montreal, as liquidity agent for the liquidity providers thereto from
time to time, pursuant to which Palisades XVI borrowed approximately $227 million in order to finance a portion of the
$300 million purchase price for a portfolio of approximately $6.9 billion in face value receivables. On December 1,
2008, as a result of the actual collections being lower than the minimum collection rates required under the Agreement
for the month ended November 30, 2008, a termination event occurred under the Agreement. In order to address this
issue, the parties to the Agreement executed a Waiver (the "Waiver") dated as of December 1, 2008. The Waiver provided
that, among other things, the termination event would be waived until December 22, 2008, which was later extended to
December 31, 2008 and further extended until January 14, 2009.
In connection with the Waiver, Palisades XVI and BMO continue to negotiate a fourth amendment (the "Fourth
Amendment") to the Receivables Financing Agreement, which would, among other things, lower the minimum collection rate
and, under certain circumstances, extend the maturity date. In connection with the proposed Fourth Amendment, the
Company is negotiating limited credit support (representing less than 2 percent of its total assets) for the benefit of
BMO, and an intercreditor agreement (the "Intercreditor Agreement"). This arrangement will require the consent of the
consortium of banks that provide the Company's existing line of credit under the Fourth Amended and Restated Loan
Agreement (the "Credit Agreement"). In connection with obtaining such consent, the Company is also discussing other
amendments, including amending certain provisions of the Credit Agreement (the "Credit Agreement Amendment") to reduce
the maximum availability and amend certain financial covenants of the Credit Agreement. There can be no assurance the
Company will be able to negotiate any or all of the Fourth Amendment, the Intercreditor Agreement or the Credit
Agreement Amendment and related documents, or that the terms of any such documents will be favorable to the Company.
As senior management has been engaged in negotiating the Fourth Amendment, the Intercreditor Agreement, the Credit
Agreement Amendment and related documents, the Company is unable to file its annual report on Form 10-K for the year
ended September 30, 2008.
The Company does anticipate filing its Form 10-K for the fiscal year ended September 30, 2008 within the next 15
days.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
ASTA FUNDING, INC.
Date:
December 31, 2008
By:
/s/ Mitchell Cohen
Mitchell Cohen
Chief Financial Officer