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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): January 14, 2009</B>

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<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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    <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 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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    <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: 5%">As previously reported, Palisades Acquisition XVI, LLC (&#147;Palisades XVI&#148;), an indirect wholly owned
subsidiary of Asta Funding, Inc. (the &#147;Company&#148;), entered into a Receivables Financing Agreement,&nbsp; (as amended, the
&#147;Agreement&#148;), with, among other parties, BMO Capital Markets Corp. (&#147;BMO&#148;), 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.&nbsp;


<P align="justify" style="font-size: 10pt; text-indent: 4%">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. &nbsp;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;).&nbsp; 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%">In order to address these issues, the parties to the Agreement&nbsp;have executed&nbsp;a series of waivers&nbsp;of the
termination event, the latest of which is&nbsp;dated as of January&nbsp;14, 2009, which now provides that, among other things,
the termination event would be waived until January&nbsp;23, 2009.&nbsp;


<P align="justify" style="font-size: 10pt; text-indent: 4%">The description of the Waiver set forth herein does not purport to be complete and is qualified in its entirety by
reference to the full text of the Waiver, a copy of which will be filed as an exhibit to the Company&#146;s Annual Report on
Form 10-K for fiscal year ended September&nbsp;30, 2008.

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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.


<P align="justify" style="font-size: 10pt; margin-left: 48%; font-size: 10pt"><B>ASTA FUNDING, INC.</B>


<P align="justify" style="font-size: 10pt">Date:<U> January&nbsp;15, 2008</U>



<P align="justify" style="font-size: 10pt; margin-left: 48%; font-size: 10pt; margin-top: -11pt">By:<U> <B>/</B>s/ Mitchell Cohen&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Mitchell Cohen<BR>
Chief Financial Officer<BR>


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{"company-data": {"conformed-name": "ASTA FUNDING INC", "cik": "0001001258", "assigned-sic": "6153", "irs-number": "223388607", "state-of-incorporation": "DE", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26906", "film-number": "09529264"}, "business-address": {"street1": "210 SYLVAN AVE", "city": "ENGLEWOOD CLIFFS", "state": "NJ", "zip": "07632", "phone": "2015675648"}, "mail-address": {"street1": "210 SYLVAN AVE", "city": "ENGLEWOOD CLIFFS", "state": "NJ", "zip": "07632"}}
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): January 14, 2009
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
As previously reported, Palisades Acquisition XVI, LLC ("Palisades XVI"), an indirect wholly owned
subsidiary of Asta Funding, Inc. (the "Company"), entered into a Receivables Financing Agreement,  (as amended, the
"Agreement"), with, among other parties, BMO Capital Markets Corp. ("BMO"), 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.
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.
In order to address these issues, the parties to the Agreement have executed a series of waivers of the
termination event, the latest of which is dated as of January 14, 2009, which now provides that, among other things,
the termination event would be waived until January 23, 2009.
The description of the Waiver set forth herein does not purport to be complete and is qualified in its entirety by
reference to the full text of the Waiver, a copy of which will be filed as an exhibit to the Company's Annual Report on
Form 10-K for fiscal year ended September 30, 2008.
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:
January 15, 2008
By:
/
s/ Mitchell Cohen
Mitchell Cohen
Chief Financial Officer