If they have cancelled the debt you might try submitting your 1099 C to the credit bureaus as proof that a debt cancellation occurred. It sounds like this is mostly a question about a disputed credit report so asking them directly to remove it may be your first step.
These statements do not constitute legal advice. They are meant to be general in nature, for any specific legal questions you should always seek the counsel of an experienced attorney.
You should also consider amending your 2013 taxes by filing a Form 1040X and adding a
Form 982 that would excuse the payment of taxes caused by the Form 1099C. Many people are eligible to file the Form 982. It's very simple. Good luck.
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