SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
Of the Securities Exchange Act of 1934
(Amendment No.____)

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

ASTA FUNDING, INC.
___________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X| No fee required.

|_| Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:
______________________________________________________________

(2) Aggregate number of securities to which transaction applies:
______________________________________________________________

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________________

(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:

|_| Fee paid previously with preliminary materials.

|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
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(4) Date Filed:
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ASTA FUNDING, INC.
210 SYLVAN AVENUE
ENGLEWOOD CLIFFS, NEW JERSEY 07632

Dear Stockholder:

On behalf of the Board of Directors, you are cordially invited to attend the
Annual Meeting of Stockholders (the "Meeting") of Asta Funding, Inc. (the
"Company") to be held at the Radisson Hotel, 401 South Van Brunt Street,
Englewood, New Jersey, on March 21, 2003 at 11:00 a.m.

The enclosed Notice of Meeting and the accompanying Proxy Statement describe
the business to be conducted at the Meeting. I am also pleased to enclose a
copy of the Company's 2002 Annual Report on Form 10-KSB, which contains
certain information regarding the Company and its financial results for the
fiscal year ended September 30, 2002.

It is important that your shares of Common Stock be represented and voted at
the Meeting. Accordingly, regardless of whether you plan to attend the Meeting
in person, please complete, date, sign and return the enclosed proxy card in
the envelope provided, which requires no postage if mailed in the United
States. Even if you return a signed proxy card, you may still attend the
Meeting and vote your shares in person. Every stockholder's vote is important,
whether you own a few shares or many.

I look forward to seeing you at the Meeting.

Sincerely,

Gary Stern
President and Chief Executive Officer

Dated: February 10, 2003

ASTA FUNDING, INC.
210 SYLVAN AVENUE
ENGLEWOOD CLIFFS, NEW JERSEY 07632

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 10, 2003

The Annual Meeting of Stockholders (the "Meeting") of Asta Funding, Inc.
(the "Company") will be held at the Radisson Hotel, 401 South Van Brunt
Street, Englewood, New Jersey, on March 21, 2003 at 11:00 a.m. to consider and
act upon the following:

1. The election of eight directors.

2. The transaction of such other business as may properly come before the
Meeting or any adjournments or postponements thereof.

Only holders of record of the Company's Common Stock, par value $.01 per
share, at the close of business on January 27, 2003 will be entitled to vote
at the Meeting. A complete list of those stockholders will be open to
examination by any stockholder, for any purpose germane to the Meeting, during
ordinary business hours at the Company's executive offices at 210 Sylvan
Avenue, Englewood Cliffs, New Jersey 07632 for a period of ten days prior to
the Meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Mitchell Herman, Secretary

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, MANAGEMENT URGES YOU TO
COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
THE ENCLOSED ENVELOPE. YOU MAY REVOKE THE PROXY AT ANY TIME PRIOR TO ITS
EXERCISE.

Dated: February 10, 2003

ASTA FUNDING, INC.
210 SYLVAN AVENUE
ENGLEWOOD CLIFFS, NEW JERSEY 07632
------------------------

ANNUAL MEETING OF STOCKHOLDERS
MARCH 21, 2003
------------------------

PROXY STATEMENT

The enclosed proxy is solicited by the Board of Directors of Asta Funding,
Inc. (the "Company") for use at the Annual Meeting of Stockholders to be held
at the Radisson Hotel, 401 South Van Brunt Street, Englewood, New Jersey on
March 21, 2003 at 11:00 a.m., and at any adjournments or postponements thereof
(the "Meeting") for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. A stockholder giving a proxy has the right to
revoke it by giving written notice of such revocation to the Secretary of the
Company at any time before it is voted, by submitting to the Company a duly-
executed, later-dated proxy or by voting the shares subject to such proxy by
written ballot at the Meeting. The presence at the Meeting of a stockholder
who has given a proxy does not revoke such proxy unless such stockholder files
the aforementioned notice of revocation or votes by written ballot.

This Proxy Statement and the enclosed form of proxy are first being mailed
to stockholders on or about February 10, 2003. All shares represented by valid
proxies pursuant to this solicitation (and not revoked before they are
exercised) will be voted as specified in the proxy. If a proxy is signed but
no specification is given, the shares will be voted "FOR" Proposal 1 (to elect
the Board of Directors' nominees to the Board of Directors).

The solicitation of proxies may be made by directors, officers and regular
employees of the Company or any of its subsidiaries by mail, telephone,
facsimile or telegraph or in person without additional compensation payable
with respect thereto. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxy-soliciting
material to the beneficial owners of stock held of record by such persons, and
the Company will reimburse them for reasonable out-of-pocket expenses incurred
by them in so doing. All costs relating to the solicitation of proxies will be
borne by the Company.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Only holders of shares of the Company's Common Stock, par value $.01 per
share ("Common Stock"), of record on the close of business on January 27, 2003
(the "Record Date"), are entitled to vote at the Meeting. On the Record Date,
the Company had outstanding 4,080,984 shares of Common Stock. Each holder of
Common Stock will have the right to one vote for each share standing in such
holder's name on the books of the Company as of the close of business on the
Record Date with respect to each of the matters considered at the Meeting.
There are no cumulative voting rights with respect to the election of
Directors. Holders of the Common Stock will not have any dissenters' rights of
appraisal in connection with any of the matters to be voted on at the Meeting.

The presence in person or by proxy of the holders of shares entitled to cast
a majority of the votes of all shares entitled to vote will constitute a
quorum for purposes of conducting business at the Meeting. Assuming that a
quorum is present, directors will be elected by a plurality of the votes cast.
Stockholders vote at the Meeting by casting ballots (in person or by proxy),
which are tabulated, by a person or persons appointed by the Board of
Directors before the Meeting to serve as inspector or inspectors of election
at the Meeting. For purposes of determining the votes cast with respect to any
matter presented for consideration at the Meeting, only those votes cast "for"
or "against" are included. Pursuant to Delaware corporate law, abstentions and
broker non-votes are counted only for the purpose of determining whether a
quorum is present.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information as of January 27, 2003 with
respect to beneficial ownership of the Company's Common Stock by (i) each
director and executive officer, (ii) each person known by the Company to own
beneficially more than five percent of the Company's outstanding Common Stock,
and (iii) all directors and executive officers as a group. Unless otherwise
indicated, the address of each such person is c/o Asta Funding, Inc., 210
Sylvan Avenue, Englewood Cliffs, New Jersey 07632. All persons listed have
sole voting and investment power with respect to their shares unless otherwise
indicated.

Name and Address Number of Shares Percentage of Shares
of Beneficial Owner Beneficially Owned (1) Beneficially Owned (%)
------------------- ---------------------- ----------------------

Arthur Stern ................ 614,074(2) 14.7%
Gary Stern .................. 1,749,523(3) 40.6
Mitchell Herman ............. 109,441(4) 2.7
Herman Badillo .............. 24,167(5) *
909 Third Avenue
New York, New York 10022
Edward Celano ............... 6,833(6) *
1133 Avenue of the Americas
New York, New York 10036
David Slackman .............. 5,000(7) *
28 Markwood Lane
East Northport, NY 11731
Harvey Leibowitz ............ 67,667(8) *
c/o Sterling National Bank
500 Seventh Avenue
New York, New York 10018
Michael Feinsod ............. 6,000(9) *
c/o Infinity Capital, LLC
767 Third Avenue, 16th Floor
New York, New York 10017
Barbara Marburger ........... 459,013(10) 11.2
9 Locust Hollow Road
Monsey, New York 10952
All executive officers and
directors as a group (8
persons) .................... 2,582,705(11) 57.4%

- ---------------
* Less than 1%
(1) Any shares of Common Stock that any person named above has the right to
acquire within 60 days of January 27, 2003 is deemed to be outstanding
for purposes of calculating the ownership percentage of such person, but
is not deemed to be outstanding for purposes of calculating the
beneficial ownership percentage of any other person.
(2) Includes 99,833 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003 and 107,271
shares of Common Stock owned by Asta Group, Incorporated ("Group") which
shares are attributable to Arthur Stern based on his percentage ownership
of Group. Excludes 33,667 shares of Common Stock issuable upon exercise
of options that are not exercisable within 60 days of January 27, 2003.
(3) Includes 231,000 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003, 339,426 shares
of Common Stock owned by Gary Stern as custodian for his minor children
and 142,761 shares of Common Stock owned by Group, which shares are
attributable to Gary Stern based on his percentage ownership of Group.
Excludes 82,000 shares of Common Stock issuable upon exercise of options
that are not exercisable within 60 days of January 27, 2003.
(4) Includes 29,667 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003 and 8,500 shares
of Common Stock owned by Mitchell Herman as custodian for his minor
child. Excludes 35,333 shares of Common Stock issuable upon exercise of
options that are not exercisable within 60 days of January 27,
2003. (Footnotes continued on next page)

(Footnotes continued from previous page)

(5) Represents 24,167 shares of Common Stock issuable upon exercise of
options that are exercisable within 60 days of January 27, 2003. Excludes
15,333 shares of Common Stock issuable upon exercise of options that are
not exercisable within 60 days of January 27, 2003.
(6) Represents 6,833 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003. Excludes 12,000
shares of Common Stock issuable upon exercise of options that are not
exercisable within 60 days of January 27, 2003.
(7) Represents 5,000 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003. Excludes 5,000
shares of Common Stock issuable upon exercise of options that are not
exercisable within 60 days of January 27, 2003.
(8) Includes 15,167 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003. Excludes 15,333
shares of Common Stock issuable upon exercise of options that are not
exercisable within 60 days of January 27, 2003.
(9) Includes 6,000 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003, and 400 shares
of Common Stock owned by Michael Feinsod as custodian for his minor
child. Excludes 12,000 shares of Common Stock issuable upon exercise of
options that are not exercisable within 60 days of January 27, 2003.
(10) Includes 211,098 shares of Common stock owned by Barbara Marburger as
custodian for her minor children and 35,448 shares of Common Stock owned
by Group, which shares are attributable to Barbara Marburger based on her
percentage ownership of Group. Barbara Marburger is the daughter of
Arthur Stern and the sister of Gary Stern.
(11) Includes 417,667 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days of January 27, 2003. Excludes 215,666
shares of Common Stock issuable upon exercise of options that are not
exercisable within 60 days of January 27, 2003.

PROPOSAL ONE

ELECTION OF DIRECTORS

In accordance with the Company's Certificate of Incorporation and Bylaws,
the number of directors of the Company has been set by the Board of Directors
at eight. At the Meeting, eight directors will be elected by the stockholders
to serve until the next annual meeting of stockholders and until their
successors are duly elected and qualified.

All eight nominees are currently directors. Each person named herein as a
nominee for director has consented to serve, and it is not contemplated that
any nominee would be unable to serve, as a director. However, if a nominee is
unable to serve as a director, a substitute will be selected by the Board of
Directors and all proxies eligible to be voted for the Board of Directors'
nominees will be voted for such other person.

The following sets forth certain information relating to the eight nominees
for election to the Board of Directors:

Name Age Position
- ---- --- --------

Arthur Stern .......... 81 Chairman of the Board and Executive Vice
President

Gary Stern ............ 50 Director, President and Chief Executive Officer

Mitchell Herman ....... 44 Director, Secretary and Chief Financial Officer

Herman Badillo (2) .... 72 Director

Edward Celano (1) ..... 62 Director

David Slackman (1) .... 55 Director

Harvey Leibowitz 69
(1)(2)............... Director

Michael Feinsod (2) ... 30 Director

- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee

Arthur Stern has been a director and has served as Chairman of the Board of
Directors of the Company since the Company's inception in July 1994. Since
1963, Mr. Stern has been President of Asta Group, Incorporated, a consumer
finance company ("Group"). In such capacities, he has obtained substantial
experience in distressed consumer credit analysis and receivables collections.

Gary Stern has been a director and the President and Chief Executive Officer
of the Company since the Company's inception in July 1994. Mr. Stern has been
Vice President, Secretary, Treasurer and a director of Group since 1980 and
held other positions with Group prior thereto. In such capacities, he has
obtained experience in distressed consumer credit analysis and receivables
collections.

Mitchell Herman has been a director of the Company since September 1995. He
has been the Chief Financial Officer of the Company since the Company's
inception in July 1994 and the Chief Financial Officer of Group since May
1994. From September 1993 to May 1994, he was a manager with Paul Abrams &
Co., a certified public accounting firm. From September 1990 to September
1993, Mr. Herman was a senior accountant with Shapiro & Lieberman, a certified
public accounting firm. Mr. Herman is a certified public accountant.

Herman Badillo has been a director of the Company since September 1995. He
has been a member of Fischbein, Badillo, Wagner & Harding, a law firm located
in New York City, for more than five years. He has formerly served as Special
Counsel to the Mayor of New York City for Fiscal Oversight of Education and as
a member of the Mayor's Advisory Committee on the Judiciary. Mr. Badillo
served as a United States Congressman from 1971 to 1978 and Deputy Mayor of
New York City from 1978 to 1979.

Edward Celano has been a director of the Company since September 1995.
Mr. Celano has served as a consultant to M.R. Weiser & Co. since March 2001.
He was formally an Executive Vice President of Atlantic Bank from May 1996 to
February 2001. Prior to May 1996, Mr. Celano was a Senior vice President of
NatWest Bank after having held different positions at the bank for over 20
years.

Harvey Leibowitz has been a director of the Company since March 2000.
Mr. Leibowitz has served as a Senior Vice President of Sterling National Bank
since June 1994. Prior to June 1994, Mr. Leibowitz was employed as a Senior
Vice President and Vice President of several banks and financial institutions
since 1963.

Michael Feinsod has been a director of the Company since March 2001.
Mr. Feinsod has been a Managing Member of Infinity Capital, LLC, an investment
partnership, since January 1999. Mr. Feinsod was formerly an investment
analyst and portfolio manager with Mark Boyar & Company, Inc. from June 1997
to January 1999.

David Slackman has been a director of the Company since May 2002.
Mr. Slackman has served as President, Manhattan Market -- New York of Commerce
Bank since June 2001. Prior to June 2001, Mr. Slackman was an Executive Vice
President of Atlantic Bank of New York from 1994 to 2001 and a Senior Vice
President of the Dime Savings Bank from 1986 to 1994.

Arthur Stern is the father of Gary Stern. There are no other family
relationships among directors or officers of the Company.

BOARD ORGANIZATION AND MEETINGS

During the fiscal year ended September 30, 2002, the Board of Directors held
four meetings and acted four times by unanimous consent, the Audit Committee
held one meeting and the Compensation Committee held one meeting. During the
2002 fiscal year, each member of the Board of Directors, with the exception of
General Buster Glosson, a former director of the Company who resigned from the
Board of Directors in November 2002, attended at least 75% of all meetings of
the Board of Directors and committees of the Board of Directors of which such
director was a member. There are two standing committees of the Board of
Directors, each of which is described below. The Company discontinued the
Executive and Nominating Committees during the last fiscal year.

Compensation Committee. The Compensation Committee consists of Herman
Badillo (the Chairman), Michael Feinsod and Harvey Leibowitz. The Compensation
Committee is empowered by the Board of Directors to review the executive
compensation of the Company's officers and directors and to recommend any
changes in compensation to the full Board of Directors.

Audit Committee. The Audit Committee consists of Harvey Leibowitz (the
Chairman), David Slackman and Edward Celano. The Audit Committee is empowered
by the Board of Directors to, among other things: serve as an independent and
objective party to monitor the Company's financial reporting process, internal
control system and disclosure control system; review and appraise the audit
efforts of the Company's independent accountants; assume direct responsibility
for the appointment, compensation, retention and oversight of the work of the
outside auditors and for the resolution of disputes between the outside
auditors and the Company's management regarding financial reporting issues;
and provide an open avenue of communication among the independent accountants,
financial and senior management, and the Board.

The Audit Committee has selected Eisner LLP to serve as the Company's
independent accountants during the current fiscal year. Eisner LLP served as
the Company's independent accountants during the fiscal year ended
September 30, 2002. A representative of Eisner LLP is expected to be present
at the Annual Meeting to make such statements as Eisner LLP may desire and
will be available to answer appropriate questions from shareholders.

Audit Committee Charter. The Audit Committee performed its duties during
fiscal 2002 under a written charter approved by the Board of Directors. The
Audit Committee has reviewed the relevant requirements of the Sarbanes-Oxley
Act, the proposed rules of the SEC and the proposed new listing standards of
the Nasdaq Stock Market regarding audit committee policies. Although some of
these rules and standards have not been finalized, the Board of Directors has
adopted an amended charter to voluntarily implement certain of the proposed
rules and standards. A copy of the Audit Committee Charter is attached hereto.
The Board of Directors and the Audit Committee intend to further amend this
charter, if necessary, as rules and standards are finalized by the SEC and the
Nasdaq Stock Market to reflect changes in the proposals or additional
requirements.

Independence of Audit Committee Members. The Company's securities are
listed on the Nasdaq National Market and are governed by its listing
standards. All members of the Audit Committee have been determined to be
independent pursuant to Rule 4200(a)(15) of the National Association of
Securities Dealers' listing standards.

Audit Committee Report. In connection with the preparation and filing of
the Company's Annual Report on Form 10-KSB, for the fiscal year ended
September 30, 2002:

(1) The Audit Committee reviewed and discussed the audited financial
statements with the Company's management.

(2) The Audit Committee discussed with the Company's independent auditors
the matters required to be discussed by SAS 61, as may be modified or
supplemented.

(3) The Audit Committee received and reviewed the written disclosures and
the letter from the Company's independent auditors required by the
Independence Standards Board Standard No. 1

(Independence Discussions with Audit Committees), as may be modified or
supplemented, and discussed with the Company's independent auditors any
relationships that may impact their objectivity and independence and
satisfied itself as to the auditors' independence.

Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the 2002 Annual Report on Form 10-KSB.

Audit Committee Members:

Harvey Leibowitz (Chairman)
David Slackman
Edward Celano

The foregoing report of the Audit Committee is not to be deemed "soliciting
material" or deemed to be filed with the SEC or subject to Regulation 14A of
the Securities Exchange Act of 1934, except to the extent specifically
requested by the Company or incorporated by reference in documents otherwise
filed.

Audit Fees. The Company was billed $52,887.00 for the audit of the
Company's annual financial statements for the year ended September 30, 2002
and for the review of the financial statements included in the Company's
Quarterly Reports on Form 10-QSB filed during fiscal 2002.

Financial Information Systems Design Implementation Fees. The Company was
not billed for and did not receive any professional services described in
Paragraph (c)(4)(ii) of Rule 2-01 of the SEC's Regulation S-X (in general,
information technology services) from the Company's principal accountant
during the year ended September 30, 2002.

All Other Fees. The Company was billed $32,200 for non-audit services from
the Company's principal accountant during the year ended September 30, 2002.

Other Matters. The Audit Committee of the Board of Directors has considered
whether the provision of information technology services and other non-audit
services is compatible with maintaining the independence of the Company's
principal accountant.

Of the time expended by the Company's principal accountant to audit the
Company's financial statements for the fiscal year ended September 30, 2002,
less than 50% of such time involved work performed by persons other than the
principal accountant's full-time, permanent employees.

COMPENSATION OF DIRECTORS

Directors who are employees of the Company do not receive additional
compensation for serving as directors. Each director who is not an employee of
the Company received a fee of $10,000 for fiscal 2002 and will receive a fee
of $15,000 for fiscal 2003 for serving as a member of the Board of Directors.
In addition, each director who is not an employee of the Company receives an
additional fee of $1,000 for attendance at each committee meeting not held on
the date of a regular meeting of the Board of Directors. The Company
reimburses each director for the expenses incurred in connection with
attendance at such meetings.

On May 16, 2002, the Company granted non-qualified stock options covering
5,000 shares of Common Stock to Herman Badillo, Edward Celano, Harvey
Leibowitz, Michael Feinsod and David Slackman, at an exercise price of $14.05
per share. The options became exercisable on May 16, 2002. On November 1,
2002, the Company granted non-qualified stock options covering 10,000 shares
of Common Stock to: Herman Badillo, Edward Celano, Harvey Leibowitz, Michael
Feinsod and David Slackman at an exercise price of $9.45 per share. One-third
of such options become exercisable on November 1, 2003, 2004 and 2005.

EXECUTIVE COMPENSATION

The following table summarizes certain information relating to the
compensation paid or accrued by the Company for services rendered during the
fiscal years ended September 30, 2002, 2001 and 2000 with respect to the
Company's Chief Executive Officer and each other executive officer whose total
annual salary and bonus are $100,000 or more:

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
Annual Compensation Awards (1)
---------------------------------------- ------------
Other Securities
Annual Underlying All Other
Name and Salary Bonus Compensation Options/SARs Compensation
Principal Position Year ($) ($) ($) (2) ($) (3)
------------------------------------------------------- ---- ------- ------- ------------ ------------ ------------

Gary Stern ............................................. 2002 325,000 200,000 -- 3,000 1,722
President and Chief 2001 300,000 200,000 -- -- 1,604
Executive Officer 2000 175,000 100,000 -- 150,000 1,591
Mitchell Herman ........................................ 2002 200,000 100,000 -- 23,000 718
Chief Financial Officer 2001 175,000 100,000 -- -- 694
2000 145,000 87,500 -- -- 686
Arthur Stern ........................................... 2002 225,000 50,000 -- 3,000 --
Chairman 2001 225,000 50,000 -- -- --
2000 112,500 -- -- 50,000 --

- ---------------
(1) The Company did not grant any stock appreciation rights, restricted stock
awards or make any long-term incentive plan payout during the fiscal
years ended September 30, 2002, 2001 or 2000.
(2) Comprised solely of incentive stock options and non-qualified stock
options granted under the Company's 1995 Stock Option Plan. See "1995
Stock Option Plan."
(3) Includes insurance premium amounts paid by the Company.

Employment Agreements

Each of Gary Stern and Mitchell Herman has entered into an Employment
Agreement with the Company, which commenced on October 1, 2001 and will
continue until September 30, 2004. Arthur Stern entered into an Employment
Agreement with the Company on May 21, 2002 which will continue until May 21,
2005. The Employment Agreements for Arthur Stern, Gary Stern and Mitchell
Herman are collectively referred to as the "Employment Agreements."

The Employment Agreements provide for base annual salaries of $375,000 and
$250,000 for Messrs. Gary Stern and Herman, respectively, effective October 1,
2002. The Employment Agreement for Arthur Stern provides for a base annual
salary of $225,000, effective May 21, 2002. Each of Messrs. Gary Stern, Arthur
Stern and Herman may be granted annual bonuses in the discretion of the Board
of Directors. If Messrs. Gary Stern's or Herman's employment with the Company
is terminated for "Disability", "Cause" (as such terms are defined in the
Employment Agreements) or upon death, the Company will pay either Messrs. Gary
Stern or Herman or each of their respective estates, as the case may be, the
base annual salary and other benefits under the Employment Agreement through
the date of termination of employment. If Messrs. Gary Stern's or Herman's
employment with the Company is terminated "Without Cause" (as such term is
defined in the respective Employment Agreements), the Company will pay either
Messrs. Gary Stern or Herman or each of their respective estates, as the case
may be, the base annual salary and other benefits under the Employment
Agreement for the earlier of 18 months after the date of termination of
employment or until such time such employee becomes a full-time employee of
another employer. If Arthur Stern's employment with the Company is terminated
for "Cause" (as such term is defined in his Employment Agreement), the Company
will pay Arthur Stern, the base annual salary and other benefits under the
Employment Agreement through the date of termination of employment. If Arthur
Stern's employment with the Company is terminated for "Disability" or "Without
Cause" (as such terms are defined in the Employment Agreement), or upon death,
the Company will pay Arthur Stern or his estate, the base annual salary and
other benefits under the Employment Agreement for the remainder of the three
year term.

Each of the Employment Agreements contains certain non-competition covenants
and confidentiality provisions. During the term of the Employment Agreements
and for a period of 12 months after the date of termination of the Employment
Agreements, or for such period as the Company will continue to pay Messrs.
Gary Stern, Arthur Stern or Herman, as the case may be, their base salary and
other benefits under the

Employment Agreements, Messrs. Gary Stern, Arthur Stern and Herman, as the
case may be, will not, in any geographic area in which the Company does
business as of the date of termination of such Employment Agreement, directly
or indirectly, compete with or be engaged in the same business as the Company
or its subsidiaries.

STOCK OPTION PLANS

1995 Stock Option Plan

The 1995 Stock Option Plan was adopted in order to attract and retain
qualified directors, officers and employees of and consultants to the Company.
The following description does not purport to be complete and is qualified in
its entirety by reference to the full text of the 1995 Stock Option Plan,
which is included as an exhibit to the Company's reports filed with the SEC.

The 1995 Stock Option Plan authorizes the granting of incentive stock
options (as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code")) and non-qualified stock options to eligible employees of
the Company, including officers and directors of the Company (whether or not
employees) and consultants of the Company.

The Company has 920,000 shares of Common Stock authorized for issuance under
the 1995 Stock Option Plan and 120,000 shares remain available as of
January 27, 2003. As of January 27, 2003, approximately 45 of the Company's
employees were eligible to participate in the 1995 Stock Option Plan. Future
grants under the 1995 Stock Option Plan have not yet been determined. No
option will vest more than ten years from the date of grant and no option may
be granted after September 14, 2005.

2002 Stock Option Plan

On March 5, 2002, the Board of Directors adopted the Asta Funding, Inc. 2002
Stock Option Plan (the "2002 Plan"), which plan was approved by the Company's
stockholders on May 1, 2002. The 2002 Plan was adopted in order to attract and
retain qualified directors, officers and employees of and consultants to the
Company. The following description does not purport to be complete and is
qualified in its entirety by reference to the full text of the 2002 Plan,
which is included as an exhibit to the Company's reports filed with the SEC

The 2002 Plan authorizes the granting of incentive stock options (as defined
in Section 422 of the Code) and non-qualified stock options to eligible
employees of the Company, including officers and directors of the Company
(whether or not employees) and consultants of the Company.

The Company has 500,000 shares of Common Stock authorized for issuance under
the 2002 Plan and all were available as of January 27, 2003. As of January 27,
2003, approximately 45 of the Company's employees were eligible to participate
in the 2002 Plan. Future grants under the 2002 Plan have not yet been
determined. No option will vest more than ten years from the date of grant.

The following tables summarize certain information relating to the grant of
options to purchase Common Stock to the executive officers named in the
Summary Compensation Table.

OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)

Individual Grants
-------------------------------------------------------
Number of Total
Securities Options/SARs
Underlying Granted to Exercise of
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
- ---- ------------ ------------ ----------- ----------

Gary Stern ............................................................. 3,000(2) 11.1% $11.92 11/14/11

Mitchell Herman ........................................................ 20,000(3) 33.1% $14.05 5/16/12

3,000(2) 11.1% $11.92 11/14/11

Arthur Stern ........................................................... 3,000(2) 11.1% $11.92 11/14/11

- ---------------
(1) The Company did not grant any stock appreciation rights to its executive
officers in fiscal 2002.
(Footnotes continued on next page)

(Footnotes continued from previous page)

(2) These options vest in three equal annual installments commencing
November 14, 2002.
(3) These options vest in three equal annual installments commencing May 16,
2002.

AGGREGATED OPTION/SAR EXERCISE IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES (1)

Value of
Number of Securities Unexercised
Underlying Unexercised In-The-Money
Options/SARs Options/SARs
at FY-End (#)(1) at FY-End ($)(2)
Shares Acquired Value --------------------------- ---------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------

Gary Stern ........................ -- -- 231,000 82,000 $1,668,700 $325,200
Mitchell Herman ................... 23,000(3) $161,000 29,667 35,333 $ 146,455 $ 28,800
Arthur Stern ...................... -- -- 99,833 33,667 $ 588,793 $115,602

- ---------------
(1) The Company did not grant any stock appreciation rights.
(2) In accordance with SEC rules, values are calculated by subtracting the
exercise price from the fair market value of the underlying Common Stock.
For purposes of this table, fair market value is deemed to be $10.89, the
fair market value of a share of Common Stock on September 30, 2002
(presumed to equal the last reported sale price of the Common Stock as
reported on the Nasdaq National Market on such date).
(3) Mitchell Herman exercised 23,000 options in fiscal 2002 at an exercise
price of $5.00.

EQUITY COMPENSATION PLAN INFORMATION

The following table gives information about the Company's Common Stock that
may be issued upon the exercise of options, warrants and rights under the
Company's 1995 Stock Option Plan and 2002 Stock Option Plan, as of
September 30, 2002. These plans were the Company's only equity compensation
plans in existence as of September 30, 2002.

(c)
Number Of Securities
(a) Remaining Available For
Number Of Securities (b) Future Issuance Under
To Be Issued Upon Weighted-Average Equity Compensation
Exercise Of Exercise Price Of Plans (Excluding
Outstanding Options, Outstanding Options, Securities Reflected In
Plan Category Warrants and Rights Warrants and Rights Column (a))
- ------------- -------------------- -------------------- -----------------------

Equity Compensation Plans Approved by Shareholders....... 554,500 $5.73 741,000
Equity Compensation Plans Not Approved by Shareholders... -- -- --
------- ----- -------
Total.................................................... 554,500 $5.73 741,000
======= ===== =======

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons holding more than 10% of a
registered class of the equity securities of the Company to file with the SEC
and to provide the Company with initial reports of ownership, reports of
changes in ownership and annual reports of ownership of Common Stock and other
equity securities of the Company. Based solely upon a review of such reports
furnished to the Company, the Company believes that all such Section 16(a)
reporting requirements were timely fulfilled during the fiscal year ended
September 30, 2002, except that Mr. Badillo (a director of the Company) did
not timely file a report disclosing sales of 1,500 shares of Common Stock on
September 12, 2002 and 2,000 shares of Common Stock on September 13, 2002;
each of Mr. Badillo, Mr. Leibowitz, Mr. Feinsod, Mr. Slackman and Mr. Celano
(all directors of the Company) did not timely file a report disclosing the
grant of options for 10,000 shares of Common Stock on November 1, 2002;
Mr. Arthur Stern (a director and Executive Vice President of the Company) did
not timely file a report disclosing the grant of

options for 15,000 shares of Common Stock on November 1, 2002; Mr. Gary Stern
(a director and CEO of the Company) did not timely file a report disclosing
the grant of options for 30,000 shares of Common Stock on November 1, 2002;
and Mr. Herman (a director and CFO of the Company) did not timely file a
report disclosing the grant of options for 20,000 shares of Common Stock on
November 1, 2002. These late filings were inadvertent, and the required
filings were made promptly after noting the failures to file.

CERTAIN RELATED PARTY TRANSACTIONS

From time to time Group makes advances to the Company. During the year ended
September 30, 2002, Group did not make any advances the Company and its
subsidiaries.

The Company has employment agreements with certain of its executive
officers. See "Executive Compensation -- Employment Agreements".

In the future, transactions with officers, directors and affiliates of the
Company are anticipated to be minimal and will be approved by a majority of
the Board of Directors, including a majority of the disinterested members of
the Board of Directors, and will be made on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES TO THE BOARD OF
DIRECTORS DESCRIBED ABOVE IN PROPOSAL ONE.

STOCKHOLDER PROPOSALS

Any proposal intended to be presented by a stockholder at the next Annual
Meeting of Stockholders must comply with the rules and regulations of the SEC
and must be received by the Company at the address specified below no later
than the close of business on October 13, 2003 to be eligible for inclusion in
the Company's Proxy Statement for next year's meeting. If you desire to bring
a proposal before the next Annual Meeting and such proposal is not timely
submitted for inclusion in the Company's proxy statement, you can still submit
the proposal if it is received by the Company no later than December 27, 2003.
Any proposal should be addressed to Mitchell Herman, Secretary, Asta Funding,
Inc. 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632 and should be sent
by certified mail, return receipt requested.

OTHER MATTERS

The Board of Directors does not know of any matters, other than those
referred to in the accompanying Notice of the Annual Meeting, to be presented
at the Meeting for action by the stockholders. However, if any other matters
are properly brought before the Meeting or any adjournments thereof, it is
intended that votes will be cast with respect to such matters, pursuant to the
proxies, in accordance with the best judgment of the person acting under the
proxies.

The Company will provide without charge to each person being solicited by
this Proxy Statement, on the written request of any such person, a copy of the
Annual Report of the Company on Form 10-KSB for the fiscal year ended
September 30, 2002 (as filed with the SEC), including the financial statements
thereto. All such requests should be directed to Mitchell Herman, Secretary,
Asta Funding, Inc., 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632.

By Order of the Board of Directors

/s/ Mitchell Herman, Secretary
Mitchell Herman, Secretary

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 2002 (EXCLUDING EXHIBITS) ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING
MATERIAL OR AS A COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE
MADE.

ANNEX A

AUDIT COMMITTEE CHARTER

ASTA FUNDING, INC.
AUDIT COMMITTEE CHARTER

I. STATEMENT OF POLICY

The Audit Committee shall assist the Board of Directors (the "Board") of
Asta Funding, Inc. ("Asta") in fulfilling its oversight responsibility by
reviewing the accounting and financial reporting processes of Asta and its
subsidiaries (collectively, the "Company"), the Company's system of internal
controls regarding finance, accounting, legal compliance and ethics and the
audits of the Company's financial statements. In so doing, it is the
responsibility of the Audit Committee to maintain free and open means of
communications among the Company's Board of Directors, outside auditors and
senior management. The Audit Committee's primary responsibilities and duties
are:

o Serve as an independent and objective party to monitor the Company's
financial reporting process, internal control system and disclosure
control system.

o Review and appraise the audit efforts of the Company's independent
accountants.

o Assume direct responsibility for the appointment, compensation, retention
and oversight of the work of the outside auditors and for the resolution
of disputes between the outside auditors and the Company's management
regarding financial reporting issues.

o Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board.

The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities identified in Section IV of this Charter.

The Company shall be responsible for the providing the Audit Committee with
appropriate funding, as determined by the Audit Committee, in order to
compensate the outside auditors and advisors engaged by or employed by the
Audit Committee.

II. COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee shall consist of at least three "independent" Directors
of Asta and shall serve at the pleasure of the Board. An "independent" Director
is defined as an individual who (a) is not an officer or salaried employee or an
affiliate of the Company, (b) does not have any relationship that, in the
opinion of the Board, would interfere with his or her exercise of independent
judgment as an Audit Committee member, (c) meets the independence requirements
of the Securities and Exchange Commission (the "SEC") Nasdaq Stock Market or
such other securities exchange or market on which Asta's securities are traded
and (d) except as permitted by the SEC and the Nasdaq Stock Market or such other
securities exchange or market on which Asta's securities are traded, does not
accept any consulting, advisory or other compensatory fee from the Company.

At least one member of the Audit Committee shall be a "financial expert" as
defined by the SEC and the Nasdaq Stock Market or such other securities
exchange or market on which Asta's securities are traded. Each Audit Committee
member must be able to read and understand financial statements, including a
balance sheet, income statement, and cash flow statement.

The members of the Audit Committee shall be designated by the full Board
from time to time. The Board shall designate one member of the Audit Committee
to serve as chairperson of the committee.

A-1

III. MEETINGS AND MINUTES

The Audit Committee shall meet at least quarterly, with additional meetings
if circumstances require, for the purpose of satisfying its responsibilities.
The Audit Committee shall maintain minutes of each meeting of the Audit
Committee and shall report the actions of the Audit Committee to the Board,
with such recommendations as the Audit Committee deems appropriate.

IV. RESPONSIBILITIES AND DUTIES OF THE AUDIT COMMITTEE

The Audit Committee shall oversee and monitor the Company's accounting and
financial reporting process, internal control system and disclosure control
system, review the audits of the Company's financial statements and review and
evaluate the performance of the Company's outside auditors. In fulfilling
these duties and responsibilities, the Audit Committee shall take the
following actions, in addition to performing such functions as may be assigned
by law, the Company's certificate of incorporation, the Company's bylaws or
the Board.

1. The Audit Committee shall assume direct responsibility for the
appointment, retention and oversight of the work of the outside auditors
and, when appropriate, the replacement of the outside auditors. As part of
the audit process, the Audit Committee shall meet with the outside auditors
to discuss and decide the audit's scope. The Audit Committee shall determine
that the outside audit team engaged to perform the external audit consists
of competent, experienced, auditing professionals. The Audit Committee
shall also review and approve the compensation to be paid to the outside
auditors and shall be authorized to compensate the outside auditors.

2. The Audit Committee shall take, or recommend that the full Board take,
appropriate action to ensure the independence of the outside auditors. The
Audit Committee shall require the outside auditors to advise the Company of
any fact or circumstances that might adversely affect the outside auditors'
independence or judgment with respect to the Company under applicable
auditing standards. The Audit Committee shall require the outside auditors
to submit, on an annual basis, a formal written statement setting forth all
relationships between the outside auditors and the Company that may affect
the objectivity and independence of the outside auditors. Such statement
shall confirm that the outside auditors are not aware of any conflict of
interest prohibited by Section 10A(l) of the Securities Exchange Act of 1934
(the "Exchange Act"). The Audit Committee shall actively engage in a
dialogue with the outside auditors with respect to any disclosed
relationships or services that may impact the objectivity and independence
of the outside auditors.

3. The Audit Committee shall require the outside auditors to advise the
Audit Committee in advance in the event that the outside auditors intend to
provide any professional services to the Company other than services
provided in connection with an audit or a review of the Company's financial
statements ("non-audit services"); provided that such non-audit services are
not listed in Section 10A(g) of the Exchange Act ("prohibited services").
The Audit Committee shall approve, in advance, any non-audit services to be
provided to the Company by the Company's outside auditing firm.

4. The Audit Committee shall obtain confirmations from time to time from
the Company's outside auditing firm that such firm is not providing to the
Company (i) any prohibited services, or (ii) any other non-audit service or
any auditing service that has not been approved in advance by the Audit
Committee. The Audit Committee shall have the authority to approve the
provision of non-audit services that have not been pre-approved by the Audit
Committee, but only to the extent that such non-audit services qualify under
the de minimus exception set forth in Section 10A(i)(1)(B) of the Exchange
Act. The Audit Committee shall record in its minutes and report to the Board
all approvals of non-audit services granted by the Audit Committee.

5. The Audit Committee shall meet with the outside auditors, with no
management in attendance, to openly discuss the quality of the Company's
accounting principles as applied in its financial reporting, including
issues such as (a) the appropriateness, not just the acceptability, of the
accounting principles and financial disclosure practices used or proposed to
be used by the Company, (b) the clarity of the Company's financial
disclosures and (c) the degree of aggressiveness or conservatism that exists
in the Company's accounting principles and underlying estimates and other
significant decisions made by the Company's management in preparing the
Company's financial disclosures. The Audit Committee shall then meet,

A-2

without operating management or the outside auditors being present, to
discuss the information presented to it.

6. The Audit Committee shall meet with the outside auditors and
management to review the Company's quarterly reports on Form 10-QSB and
annual report on Form 10-KSB and discuss any significant adjustments,
management judgments and accounting estimates and any significant new
accounting policies before such forms are filed with the SEC. The Audit
Committee shall require the outside auditors to report to the Audit
Committee all critical accounting policies and practices to be used, all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with the Company's
management, ramifications of the use of such alternative disclosures and
treatments, the treatments preferred by the outside auditors and other
material written communications between the outside auditors and the
Company's management, including management's letters and schedules of
unadjusted differences.

7. Upon the completion of the annual audit, the Audit Committee shall
review the audit findings reported to it by the outside auditors, including
any comments or recommendations of the outside auditors, with the entire
Board.

8. The Audit Committee shall review all reports received from the federal
and state regulatory authorities and assure that the Board is aware of the
findings and results. In addition, it will meet with the appropriate members
of senior management designated by the Audit Committee to review the
responses to the respective regulatory reports.

9. The Audit Committee shall consider and review with management: (a)
significant findings during the year and management's responses thereto,
including the status of previous audit recommendations and (b) any
difficulties encountered in the course of their audits, including any
restrictions on the scope of activities or access to required information.

10. The Audit Committee shall consider and approve, if appropriate,
changes to the Company's auditing and accounting principles and practices,
as suggested by the outside auditors or management, and the Audit Committee
shall review with the outside auditors and management the extent to which
such changes have been implemented (to be done at an appropriate amount of
time prior to the implementation of such changes as decided by the Audit
Committee).

11. The Audit Committee shall prepare a letter for inclusion in the
Company's proxy statement describing the discharge of the Audit Committee's
responsibilities.

12. The Audit Committee will review and update this Charter periodically,
at least annually, and as conditions may dictate. The Audit Committee
Charter shall be presented to the full Board for its approval of any
changes.

13. Commencing on such date as Section 102(a) of the Sarbanes-Oxley Act
of 2002 (the "Act") becomes effective, the Audit Committee shall obtain
confirmation from the outside auditors at the commencement of each audit
that such firm is a "registered public accounting firm" as such term is
defined under the Act.

14. The Audit Committee shall have the authority to engage independent
counsel and other advisers as it determines necessary to perform its duties.

15. The Audit Committee shall establish procedures for (i) the receipt,
retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and (ii) the
confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters.

16. The Audit Committee shall investigate or consider such other matters
within the scope of its responsibilities and duties as the Audit Committee
may, in its discretion, determine to be advisable.

A-3

PROXY
ASTA FUNDING, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 21, 2003

The undersigned hereby appoints Gary Stern and Mitchell Herman, and each of
them, attorneys and proxies with power of substitution, to vote for and on
behalf of the undersigned at the Asta Funding, Inc. (the "Company") Annual
Meeting of Stockholders to be held on March 21, 2003 and at any adjournments
or postponements thereof (the "Meeting"), upon the following matters and upon
any other business that may properly come before the Meeting, as set forth in
the related Notice of Meeting and Proxy Statement, both of which have been
received by the undersigned.

This proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder. If this proxy is executed but no direction is
made, this proxy will be voted FOR the board's nominees for director.

WITHHOLD AUTHORITY
to vote for
election of
FOR* directors

1. Election of
Directors. |_| |_|

*For all of the nominees listed below (except as indicated to the contrary
below)

The nominees are: Gary Stern, Mitchell Herman, Arthur Stern, Michael Feinsod,
Herman Badillo, David Slackman, Edward Celano and Harvey Leibowitz.

(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)

- -------------------------------------------------------------------------------

(CONTINUED, AND TO BE DATED AND SIGNED, ON THE OTHER SIDE)

In their discretion, the above named proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournment
thereof and upon matters incident to the conduct of the meeting.

This proxy will be voted as directed. If not otherwise specified, this proxy
will be voted FOR the election of the director nominees named above, or if any
one or more of the nominees becomes unavailable, FOR another nominee or other
nominees to be selected by the Board of Directors.

Please sign this proxy and return it promptly whether or not you expect to
attend this Meeting. You may nevertheless vote in person if you attend.

Please sign name exactly as it appears hereon. For an account in the name of
two or more persons, each should sign, or if one signs, he or she should
attach evidence of authority.

When signing as an attorney, executor, administrator, trustee or guardian,
please give full title.

SIGNATURE(S) OF STOCKHOLDER(S)___________________________ DATED __________, 2003

PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY USING THE ENCLOSED ENVELOPE.