Sending of the 1099c was unrelated to the charge-off.
Taking a charge-off is an internal accounting measure that moves the debt on the creditor's books from a receivable asset to a non-receivable bad debt. It does not excuse the continued obligation of the consumer for the entire debt, and does not lead to sending of a 1099c, "Cancellation of Debt."
A creditor can choose to additionally cancel any debt, regardless of whether it was charged-off. Cancellation of a debt is then viewed by the IRS as converting the debt to taxable "income," and the creditor is required to provide notice thereof to both the IRS and the consumer if it is $600 or more.
However, the literature is replete with discussion of an interpretation by some creditors that sending a 1099c does not, in and of itself, constitute cancellation of the debt, notwIthstanding the title of the form and general interprettions to the contrary. Google on 1099c and terms related to non-cancellation of the debt to see a legal discussion of that controversy.
If they are continuing to assert a debt even though you have paid IRS taxes on the asserted debt amount based on notice of cancellation via a form 1099c, that would likely be a viable defense that I would assert in your answer to the court. You may need an attorney to file a brief in support of that defense should it progress to trial, as it is a very contested legal issue......
