A 1099-C is a federal (IRS) tax form for cancellation of debts. A 1099-A is similar but is issued after a foreclosure. Sometimes a creditor, after trying to collect from you, will decide that the debt is uncollectible and will “charge off” the debt in order to get a tax break. The IRS normally counts debts that you receive a 1099-C for as income, thus requiring you to pay taxes on it. However, if the debt is discharged in bankruptcy before the 1099-C is issued or if you were “insolvent” when the 1099-C/1099-A was issued, the “charged-off” debt is not counted as income for income tax purposes. If either reason applies to you, there are specific IRS forms to be submitted with your taxes to not count it as income. You accountant or tax preparer should be able to guide you to the correct forms to complete.