Debt Forgiveness Income Vs. Insolvency

[Doire]

if I can't pay a bill, and the creditor issues me a 1099 for debt forgiveness(taxable income to me) is there any solution to not having to claim it as income, such as insolvency?

[Sorel]

Yes - insolvency and/or bankruptcy are exceptions.  So is debt on a principal residence.  You can't just ignore the 1099C however.  You need to fill out Form 982 with your tax return.