When your bankruptcy discharges a debt, that debt ceases to exist. Therefore, if you file for bankruptcy and receive a discharge of the debt that the creditor eventually forgives and sends you a 1099-C for, the creditor technically has nothing to cancel because the debt is already gone.he timing of your bankruptcy is critical because a discharge only applies to debts â you can't discharge income. If you file for bankruptcy after you receive a 1099-C, what you have at this juncture is income, not a debt that you want to get rid of.