Do i have to report a 1099c on my tax return if my house was sold in a short sale?

my house which i owned since 2008 was sold in a short sale on dec 31 2015. I got a 1099c from my mortgage company which is holding me accountable for the debt of 37K as indicated on form 1099c box 5. I was under the impression that debt mortgage debt forgiveness applied here? Please help, i am using tax act to file my taxes

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