Cancellation of Debt 1099-C Question

[Josh D.]

I'm negotiating a deal and have a seller who hasn't paid her 1st or 2nd in 2 1/2 years.

I just got the 1st to accept the buyer's offer. I recently discovered the 2nd (Discover/Morgan Stanley) sent the seller a 1099-C last year. She filed the appropriate forms on her tax return last year so she wasn't taxed on the forgiveness of the debt.

If Discover sent her a 1099-C doesn't that mean they wrote off the debt? How does this affect her debt to them or their legal claim on the property?

Perhaps Discover was assuming the property would be foreclosed upon last year and as the 2nd assumed they would get nothing so they filed the paperwork writing off the debt.

I was hoping I could somehow get around getting their approval because of this.

Any insight would be appreciated!

Thanks