In a weird quirk of American law, cancelled debt is actually a kind of income in most situations, and you actually have to pay taxes on it. I bet everyone is absolutely thrilled to hear that.
If you’ve got debt that is going to be cancelled, such as for a home, car, student loan, or credit card, then you have to be careful or it’ll create a big lump of tax liability. Talk to your friendly local CPA or another specialist because there are some complicated exceptions: you don’t owe taxes on some amounts of debt forgiveness that are greater than the value of your total net assets.