A: If you made no payments but received a Form 1099C cancellation of debt, your Judgment was not "satisfied" or "resolved" or "paid off". They can still legally collect on it even though on their books they deemed it "uncollectible" and wrote it off of their books. You may even have had to pay income tax on the forgiven debt, but there is 4th Circuit case law which says they can still leave the judgment out there until it expires. Their "write off" was just for "accounting purposes". This means they are not required to report the judgment as satisfied. You will either have to pay them something, or just wait until the judgment expires or else it will remain enforceable. This judgment can impair your ability to sell or refinance real estate.
A: If you paid the judgment directly to the creditor, send them a letter (use certified mail or priority mail so you have proof of delivery and save a copy of your letter) demanding that they advise the Clerk of Court about the payments you made and advise the Clerk that the judgment is fully satisfied. If they do not do so within thirty days, go to a consumer law attorney for assistance. The judgment will still show in the public record, but the record will show it has been satisfied. The judgment will also still show in the Public Records section of a credit report for 10 years from the date of the judgment, but the credit report should show it as a "paid" civil judgment within a few months after the Clerk has marked the judgment as fully satisfied. There is no expungement for a civil judgment, so yes it has to stay on record even after the underlying debt is paid.
A: You won't go to jail if you don't show up, but a judgment will be entered against you for the full amount owed. In order to keep a judgment from being entered against you, you need to file an Affidavit which controverts one of the facts necessary for them to get a judgment. That needs to be filed no later than 5 days before the hearing and mailed to Discover's lawyer (two days plus three days for mailing), and then you also should show up for the hearing to argue your case. Discover is one of the toughest creditors out there. They rarely settle for less than 70-80% of the amount owed. Your debt settlement company is probably sending your money to creditors who don't sue and are willing to take 40% or so to settle, because that gets your debt settlement company more money in its pocket because they get a higher fee (since they "save" you more money). Discover also rarely works with debt settlement companies (I bet your company never disclosed that to you other than the fine print in your contract). You really need to speak with a bankruptcy attorney ASAP to learn about all of your available options to resolve your debt. Debt settlement companies can't give legal advice and they don;t want you to file bankrutpcy because they won;t make money off of you that way. You may have assets which Discover can take if they get a judgment against you and you don't make an agreement directly with them to resolve the matter. A bankruptcy attorne may tell you that Discover can;t take any of your assets and that proceeding with the debt settlement company will be okay - but if you have never spoken to a lawyer about your debt problems, you have not received a full and fair analysis of your situation.