The fact that you are in a community property state does not make a difference. Since your father passed away in 2020 and the 1099-C is issued in 2021 and your mother cannot file married filing joint in 2021, there is no where to report the debt.
Since your father passed away in 2020, there are no tax obligations for him in 2021.
Like I said before, keep it with your mother's tax papers for 2021 in case you get a letter from the IRS (I don't think you will). Just respond to the letter with a copy of the death certificate showing that he passed away in 2020. That should take care of it for you.
NOTE: This is the proper way to handle as long as your mother's name and social security number do not appear on the 1099-C. If her name and social security number appear on the 1099-C, then she will have to report it on her taxes. The 1099-C should have been issued and sent to you by January 31.
