I had a debt in collection that I've been paying on for a few years. I always made my payments on time and made more than minimum payment amount each time. I made my payments online each month until September of 2010. When I logged in to make my payment there was a pdf letter instead waiting there. It stated that my debt was 'Settled in Full' and I had zero balance owed. I guess now it was dumb on my part to read that as "Debt paid in Full". My problem is now I get a form 1099-C in the mail stating that I now have to claim several thousand dollars as income. I'd be okay with that IF I had made some type of agreement to 'settle' with the company but I hadn't. On 2 occasions prior the company offered to settle for a lump sum payment which wasn't even 1/3 of the debt owed. I declined the offer each time because it was still several thousand dollars I didn't have at one time. No it's not credit card bills that I ran up when I went shopping happy... it's a telephone bill my son (who was 16 at the time) ran up talking to friends all over the country. Well even that part wasn't so bad.. what made the bill so insane is he was 3 way calling with people who were calling him collect. It took 6 - 8 weeks for some of those calls to finally hit my phone bill and it amounts to several thousand dollars. I tried to get the phone company to block collect calls. At that time they said they couldn't and that I'd have to block numbers by area codes. Fine except I got charged additional fees for the privilege of doing that. How can the company charge of my debt if I was making payments on time and didn't agree to a settlement, then file this 1099-C form? 