SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 8-K

                Current Report Pursuant to Section 13 or 15(d) of
                           The Securities Act of 1934



        Date of Report (Date of earliest event reported): August 20,1999

                         Allstate Financial Corporation
             (Exact name of registrant as specified in its charter)



    Virginia                         0-17832                     54-1208450
 (State or other                   (Commission                (I.R.S. Employer
jurisdiction File                    Number)                 Identification No.)
of incorporation)


               2700 South Quincy Street, Arlington, Virginia 22206
               (Address of principal executive offices) (Zip Code)


        Registrant's telephone number, including area code (703) 931-2274



Item 5. Other Events.

     On August 20,1999, Allstate Financial Corporation (the "Company"),  entered
into a loan agreement with Value Partners,  Ltd. Value  Partners,  Ltd., a Texas
limited  partnership,  is the beneficial  owner of 44.2% of the Company's common
shares.  Under the agreement,  Value Partners advanced  Allstate  $1,000,000 for
general corporate purposes,  including working capital.  The loan bears interest
at 10% per annum,  is  unsecured,  and matures  March 31,  2000.  The Company is
required  to  prepay  the  loan  with a  portion  of  the  proceeds  of  certain
collections.

     On August 1, 1999, Allstate also entered into a forbearance  agreement with
its lenders,  IBJ Whitehall  Business  Credit  Corporation  and National Bank of
Canada.  The agreement  became effective upon the funding of the Value Partners'
loan on August 25,1999. Under the forbearance agreement,  the Company may borrow
up to  $10,000,000  or the amount  calculated  by the  lenders  based on pledged
collateral,  whichever is less,  subject to certain  limitations and conditions.
The  forbearance  agreement  covers the period to October 31,  1999.  During the
forbearance  period,  the interest  rate on advances is set at the Base Rate, as
defined, of IBJ Whitehall Business Credit  Corporation,  plus 2.25%. The Company
is required to maintain an excess of pledged  collateral value, as calculated by
the lenders, of $200,000 plus a portion of certain collections.

     Attached hereto and  incorporated  herein by reference in their entirety as
exhibits,  are  copies  of (1)  the  loan  agreement  and  (2)  the  forbearance
agreement.

Item 7(c). Exhibits


     10.1 Loan  Agreement  dated as of August 20, 1999 between  Value  Partners,
Ltd. and Allstate Financial Corporation

     10.2  Forbearance  Agreement  dated as of  August 1,  1999  among  Allstate
Financial Corporation, IBJ Whitehall



Signature

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, hereunto duly authorized.


                                        Allstate Financial Corporation

Date: September 7, 1999                 /s/ C. Fred Jackson
                                        -------------------------------
                                        By: C. Fred Jackson