My recommendation is to file, even though you may not be required to. The IRS will be looking for the 1099-C since they received a copy of it as well. To avoid the summer correspondence from them, it's best to file even if the 1099-C debt may not be taxable due to a filing requirements (explained below).
In general, you don't have to file unless one-half of your social security benefits plus your other gross income (your cancelled debt and any tax-exempt interest) is more than $25,000 ($32K if married filing jointly).
If you are required to file, the cancelled debt will be taxable unless you show to the IRS that you were insolvent. To file insolvency, you would have to use Turbo Tax cd/download versions, and manually fill out form 982 and its insolvency worksheet. It cannot be done online.
I also recommend that you determine your insolvency situation by using worksheet on page 8
of the IRS
publication 4681 first, then - once you know you need it, you can purchase cd/download Turbo Tax.
https://www.irs.gov/pub/irs-pdf/p4681.pdf
