Tax law considers most forgiven debt as income, so the amount forgiven will need to be reported on a 1099 - C form. (supermoney.com)
Before you choose debt settlement as an option, make sure that the associated fees and penalties will be less money than the potential amount of forgiven debt. (simplethriftyliving.com)
You will not owe taxes on forgiven debt in this instance. (nytimes.com)