1099-C Student Loan "Cancellation of Debt" from Key Bank

[amarchefka]

I have a question related to the discharge of student loan debt. I received a 1099-C from a student loan company stating that they had canceled my debt about a month ago. Up until this point I had no idea that they were going to do this and I was in negotiation with them to start repayments (after they had canceled my debt, but I didn't know this at the time). Every person I spoke with on the phone kept asking me "have you settled your debt with us, we can't find your account?" It was clear to me that something wasn't right.
When I received the 1099-C I filed my return and also filed for insolvency. Today I got a letter from my student loan company apologizing for the error, but they didn't mean to send me the 1099 and that I should disregard it. I've already filed, claimed insolvency and am ready to move on. At this point should I assume that Key Bank has canceled my debt and are also trying to collect on it as well? I'm convinced that if I had not been calling them to try and set up payments after going into default that they would not have claimed that it was an error. After I've filed my taxes can they still come after this money? (I have not filed bankruptcy and understand that student loans cannot be discharged in BK).

Could have been an accounting error on their part, but no one from Key Bank seems to understand what is going on.

[justbroke]

This is an interesting error. They basically canceled the debt by issuing you a 1099-C and then they want to retract that 1099-C and debt cancellation. They may have issues with the IRS now because you filed your taxes as well. I think you need a qualified professional tax specialist/attorney to answer this question.

I hope it works out for you!

[HHM]

They can actually do this; the 1099-C is actually NOT binding.

[amarchefka]

They can actually do this; the 1099-C is actually NOT binding.

If this is the case and I have already filed for insolvency (before they re-issued the new 1099C) do I need to ammend my taxes?

Also, I've read that student loan companies have cancelled debt (to get the tax credit) AND tried to collect on that debt at a later time. Anyone familiar with this?