When a person files Chapter 13 bankruptcy do the payday loan people have to change my loan to close instead?

When someone files a bankruptcy, they should and must list every debt. Including pay day loan debts. Upon filing the bankruptcy petition, the "automatic stay" prohibits the payday loan creditor from any attempt to collect the debt. Once the case is discharged, the payday loan creditor must comply with the discharge order and make no attempt to collect the debt.

They can wait until you complete your Chapter 13 Plan. Why you might ask? Because if the Chapter 13 case is dismissed, they can restart their collection efforts again. There is a fairly high default rate on these Chapter 13's.

Most payday loans are unsecured (meaning you didn't give them your car title or a second mortgage). Unsecured loans in a Chapter 13 are prevented from taking any collection activity during the life of the chapter 13 and are discharged at the end of the Chapter 13.

It is unclear what you are asking. If the payday loan company files a claim in your bankruptcy, they may get paid something from your plan payments. If they do not file a claim, they will get paid nothing. In any event, upon the successful completion of your Chapter 13, this debt will be discharged. How the lender choses to show the debt on their books until you receive a discharge is something that is up to the lender. The bankruptcy stay does prevent the lender from taking any steps to attempt to collect.

If the payday loan was obtained (even renewals) before you file a Chapter 13, then it is required to be handled in the Chapter 13 Plan.