This means that your lender no longer considers your debt as an asset because it is unlikely to be collected. Confusion arises from borrowers when they see the notice that their debt has been canceled. Cancellation means a debtor is no longer obligated to repay the debt. However, that will have negative consequences for their credit history and score. This notation doesn't mean that the debtor is entirely free from its impact. The canceled debt will still be reported to credit bureaus, which will have negative impact on credit history and scores. In addition, the canceled debt may have tax implications, as the forgiven amount could be considered taxable income. It's advisable to consult with a financial professional or credit counselor to understand the specific implications in your situation.