Legal Question in Credit and Debt Law in California

Yup. The 1099-c only affects taxes for you and the creditor. They have to file it to take the loss as a bad debt, and it is income to you as far as the IRS is concerned. If they later collect, or sell the debt and someone else collects it from you, it is income to them rather than a repaid loan, and it would then be deductible to you. None of that affects whether the money is owed, and it will continue to show as a delinquent debt on your credit for that reason. Even once the statute of limitations for suing on the debt runs, it doesn't come off your credit, because it is still a debt that was not paid as agreed and remains reported as such. The only effect of a write-off on your credit is that the monthly payment is no longer counted toward your monthly payment obligations.