When a credit card forgives a card holder and writes off the balance they issue a 1099-C which compels the recipeint to recognize the income. You can do the same process with your company. See the link below:
I wouldn't cancel the lawsuit or the lien. You may want to discuss with your lawyer as to any effects of sending out a 1099 or writing off the debt on the lawsuit. You want to keep as many options running as possible and therefore keep your chance of collection high.