Tax implications for debt settlement

Hi all. Just found this forum and have been really encouraged by what I read. I'm starting to embark on a debt settlement journey. The bills are getting overwhelming and the minimum monthly payments are becoming impossible to make. I've found lots of good information and success stories with the debt settlement process itself here. However, I'd like to know a little more about the tax consequences of such a settlement. My understanding is that the lending companies will send a 1099 to anyone who negotiates a settlement for the difference between the full amount owed and the settlement amount. Is this then taxable as ordinary income to the recipient? Is there any way to avoid the tax on this amount? Just trying to understand all the aspects of going through a debt settlement.

Thanks all in advance for your comments and advice.