No, this debt was discharged in bankruptcy, so the bank lost their chance to claim it as a debt that has been forgiven. So you don't have to pay taxes on this 1099C. However, if you have a tax preparer, be sure to let them know this info because there is a tax form that will need to be submitted so that the IRS doesn't get confused. Hope this perspective helps!
You will want to include with your return form 982 to alert IRS that this debt was discharged in a title 11 case and therefore should not be considered taxable income.
You just need to file IRS Form 982 showing that this debt was discharged in your bankruptcy. That will eliminate the tax. A copy of that form, that you can fill in and print out and then file with the IRS along with your tax return, is provided here: http://www.irs.gov/pub/irs-pdf/f982.pdf