1001258--12/14/2010--ASTA_FUNDING

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The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act will subject us to substantial additional federal regulation, and we cannot predict the effect of such regulation on our business, results of operations, cash flows or financial condition. Government regulations may limit our ability to recover and enforce the collection of our receivables. The current economic environment has slowed our ability to collect from our debtors. We may not be able to purchase consumer receivable portfolios at favorable prices or on sufficiently favorable terms or at all. Our future operating results will be negatively impacted as we have not replaced our defaulted consumer receivables at historic levels. Our inability to purchase sufficient quantities of receivables portfolios may necessitate workforce reductions, which may harm our business. We have seen at certain times that the market for acquiring consumer receivable portfolios has become more competitive, thereby diminishing from time to time our ability to acquire such receivables at prices we are willing to pay. We have risks associated with our purchase of $6.9 billion in face value of receivables purchased for $300 million in March 2007 (the Portfolio Purchase ) which has not met our expectations and has and may continue to adversely impact our financial position and results of operations. There is no assurance that we will realize the full value of the deferred tax asset. With portfolios classified under the interest method, our projections of future cash flows from our portfolio purchases may prove to be inaccurate, which could result in reduced revenues or the recording of impairment charges if we do not achieve the collections forecasted by our model. We use estimates for recognizing finance income on a portion of our consumer receivables acquired for liquidation and our earnings would be reduced if actual results are less than estimated. As the mix of our portfolios has shifted to the cost recovery method, there is a negative impact on finance income as no finance income is recognized on the cost recovery portfolios until the carrying value has been recovered. We may not be able to collect sufficient amounts on our consumer receivable portfolios to recover the costs associated with the purchase of those portfolios and to fund our operations. We are subject to competition for the purchase of consumer receivable portfolios which could result in an increase in the prices of such portfolios. We are dependent upon third parties who we do not control to service a significant portion of our consumer receivable portfolios. The loss of certain servicers could have a material adverse effect on our financial position and results of operation. The current economic environment has had adverse effects on others in this industry; certain third parties providing services to us have filed for bankruptcy protection which has delayed collections. We rely on our third party collectors to comply with all rules and regulations and maintain proper internal controls over their accounting and operations. We may rely on third parties to locate, identify and evaluate consumer receivable portfolios available for purchase. We have an ongoing dispute with a significant servicer for which we are currently negotiating a settlement. Our collections may decrease if bankruptcy filings increase. The loss of any of our executive officers may adversely affect our operations and our ability to successfully acquire receivable portfolios. The Stern family effectively controls the Company, substantially reducing the influence of our other stockholders. Current economic conditions have had a significant impact on our ability to sell accounts. An unfavorable government review of our tax returns could adversely affect our operating results. Negative press regarding the debt collection industry may have a negative impact on a debtor s willingness to pay the debt we acquire. Class action suits and other litigation in our industry could divert our management s attention from operating our business and increase our expenses. We may seek to make acquisitions that prove unsuccessful or strain or divert our resources. Our investments in other businesses and entry into new business ventures may adversely affect our operations. If our technology and phone systems are not operational, our operations could be disrupted and our ability to successfully acquire receivable portfolios and receive collections from debtors could be adversely affected. Our organizational documents and Delaware law may make it harder for us to be acquired without the consent and cooperation of our board of directors and management. Future sales of our common stock by members of the Stern Family or other shareholders may depress our stock price. We have the ability to issue preferred shares, warrants, convertible debt and other securities without shareholder approval which could dilute the relative ownership interest of current shareholders and adversely effect our share price. Climate change and related regulatory responses may impact our business.

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1001258--12/14/2010--ASTA_FUNDING_INC