only IF the debt holder can show in court they are legally entitled to collect the debt which they can’t do in almost every case.
if they can’t the judge will not enter a judgement for any amount.
Same goes for normal theft too. If the owner can't prove to the judge that what you stole was their property to begin with, then you get to keep it.
Do you have any tips on that? How can I steal a new car without the dealer being able to prove it? Surely you don't stop your scheming at debt cancellation.