bh18 – not necessarily. look up IRS Form 982 and speak to an accountant.
For example if you have a credit card with a balance of 60,000 and settle for 20,000, you will – as bh18 correctly said above – get a 1099 for the 40,000 you saved and which counts as income. However if you can show that at the time of the settlement you were insolvent (your remaining liabilities exceed your assets by at least 40,000) then you dont have to pay one cent of taxes on that money.