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

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

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

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest event reported): January 30, 2009</B>

<P style="font-size: 24pt" align="center"><B>ASTA FUNDING, INC.<BR>
</B><FONT style="font-size: 10pt">(Exact name of
registrant as specified in its charter) </FONT>
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  <TD width="32%">&nbsp;</TD>
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  <TD style="border-bottom: #000000 1px solid"><B>Delaware</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>0-26906</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>22-3388607</B></TD>
 </TR>
 <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 style="border-bottom: #000000 1px solid"><B>210 Sylvan Avenue, Englewood Cliffs, New Jersey<BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><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 style="font-size: 10pt" align="center">Registrant&#8217;s telephone number, including area code: <B>201-567-5648</B>
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  <TD style="border-bottom: #000000 1px solid" nowrap><B>&nbsp;</B></TD>
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  <TD nowrap>(Former name or former address if changed since last report.)</TD>
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<P style="font-size: 10pt" align="left">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 style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT face="Wingdings">o</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">o</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 style="font-size: 10pt" align="justify"><B>Item&nbsp;8.01. Other Events</B>

<P style="font-size: 10pt; text-indent: 2%" align="justify">As previously reported, Palisades Acquisition XVI, LLC
(&#8220;Palisades XVI&#8221;), an indirect wholly owned subsidiary of Asta Funding, Inc. (the &#8220;Company&#8221;),
entered into a Receivables Financing Agreement,&nbsp; (as amended, the &#8220;Agreement&#8221;), with, among other
parties, BMO Capital Markets Corp. (&#8220;BMO&#8221;), 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. As a result of the actual collections being lower than the
minimum collection rates required under the Agreement for the months ended November&nbsp;30, 2008, December&nbsp;31,
2008, and January&nbsp;31, 2009 termination events occurred under the Agreement.&nbsp;

<P style="font-size: 10pt; text-indent: 2%" align="justify">Palisades XVI and BMO continue to negotiate a fourth
amendment (the &#8220;Fourth Amendment&#8221;) 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 &#8220;Intercreditor
Agreement&#8221;). This arrangement will require the consent of the consortium of banks that provide the
Company&#8217;s existing line of credit under the Fourth Amended and Restated Loan Agreement (the &#8220;Credit
Agreement&#8221;).&nbsp; In connection with obtaining such consent, the Company is also discussing other amendments,
including amending certain provisions of the Credit Agreement (the &#8220;Credit Agreement Amendment&#8221;) 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 style="font-size: 10pt; text-indent: 2%" align="justify">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;30, 2009, which now provides that, among other things, the termination event would be waived until
February&nbsp;13, 2009.&nbsp;

<P style="font-size: 10pt; text-indent: 2%" align="justify">The Company anticipates signing the amendments and related
documents shortly.

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<P style="font-size: 10pt" align="center"><B>SIGNATURE</B>

<P style="font-size: 10pt; text-indent: 2%" align="justify">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 style="font-size: 10pt; margin-left: 11%" align="justify"><B>ASTA FUNDING, INC.</B>

<P style="font-size: 10pt" align="justify">Date: February&nbsp;6, 2009

<P style="font-size: 10pt" align="justify">By:<U> <B>/</B>s/ Gary
Stern&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;&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>
Gary
Stern<BR>
President &amp; Chief Executive 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": "09578137"}, "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 30, 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. As a result of the actual collections being lower than the
minimum collection rates required under the Agreement for the months ended November 30, 2008, December 31,
2008, and January 31, 2009 termination events 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 30, 2009, which now provides that, among other things, the termination event would be waived until
February 13, 2009.
The Company anticipates signing the amendments and related
documents shortly.
2
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: February 6, 2009
By:
/
s/ Gary
Stern
Gary
Stern
President & Chief Executive Officer