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") and the
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.
 
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,
   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-Q and annual
   report on Form 10-K 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.