You will probably get a Form 1099-C, unless that is negotiated as a part of the written settlement agreement. If you get a Form 1099-C, you may pay tax on the amount of the debt that was reduced. As to being sued by "creditors", you did not provide enough information.
If the creditor files a Form 1099 on this settlement you may not have to pay taxes on it, as suggested by the attorney above. You may be legally "insolvent.." So, you simply file a Form 982 with your taxes and all is well.
But, sooner or later all of your creditors will sue you if you don't pay them. And yes, they will notice that you have paid one and therefore think you can afford to pay them all.
BTW, I hope you are not using 401k money to settle your debts. It's exempt in Bankruptcy and its a bad idea to rob the future to pay people who don't even like you. Good luck.
This answer is not intended to create an attorney-client relationship and may not be relied upon as legal advice. A careful examination of the facts is necessary before a legal answer may be relied on. You should consult your own attorney before taking or refraining from any legal action.
$15,000 settlement on a $40,000 debt is a pretty good settlement. You can also try to structure it over time if you can't pay it in full. I agree with my colleagues that you'll likely receive a 1099-C for the discharged amount, but you may also file IRS Form 982 which allows you to reduce the amount of indebtedness for forgiven amounts if you are not liquid. You can also refer to IRS Publication 4681 for more on this topic.
This answer is intended to provide general information only. It does not create an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations. Donald A. Green is only licensed to practice law in California and Oregon.