Character.AI Bankruptcy: What Happens to Your Chats and Characters

What did Character.AI file, and where?

On October 12, 2026, Character Technologies, Inc., the company behind Character.AI, filed a voluntary Chapter 11 petition in the US Bankruptcy Court for the District of Delaware, case number 26-11603 (BLS). Judge Brendan Linehan Shannon presides, and the case documents are public on the Stretto case site.

This Chapter 11 is a sale, not a closure: the company is using the court process to sell what it owns. In its own post it said the platform "remains up and running", that subscriptions "remain active, and billing is unchanged for now", and that it intends to tell subscribers in advance if paid features change.

Why now: court papers summarized by PPC Land and Bondoro describe losses of about $8 million to $9 million a month, and an earlier search for a buyer, before the filing, produced no workable offer.

What is Disney buying, and what is left out?

Disney Worldwide Services, Inc. is the opening bidder, called the stalking horse. It offers $20 million for a perpetual, worldwide, nonexclusive license to specified technology and patents, such as the chat, safety and age prediction systems. Its bid sets the floor: news reports put the minimum rival bid at $21.7 million.

What Disney's opening bid covers, per the sale motion filed with the court (October 2026)
What Character.AI owns	In Disney's bid?	What happens to it
Technology and patents	Yes, as a nonexclusive license	The estate keeps them and can license them to others too
The Character.AI app and website	No	Stays with the estate: a buyer, or a wind down
The brand and domains	No	Stays with the estate
Accounts, chats and characters	No	Stays with the estate. Any sale of user data is contested in court.
Trained models, including chat styles	No	Stays with the estate

The estate means everything the company owns while the court oversees the case. Whatever is outside Disney's bid can still go to another buyer. Disney also hired most of Character.AI's staff before the filing, including its former chief executive, and under a transition agreement they help run the service and the sale.

What are the key dates in the sale?

Bids come first, then an auction only if a rival bid qualifies, then a sale hearing where the judge decides whether to approve the sale. Many older articles still give the first proposed dates, which have since moved.

Character.AI filed for Chapter 11 on October 12, 2026 and is selling assets under court supervision. When we last checked it was still running, paid plans continued, and no shutdown date had been announced. Disney's opening bid of $20 million covers a license to Character.AI's technology and patents, not the app, the brand or user data. No buyer for the platform has been named publicly. The company told the court that if no workable offer arrives for the rest, the platform will be wound down.

October 12Character.AI files for Chapter 11 in Delaware. The service stays up.
October 13Disney is named the opening (stalking horse) bidder: $20 million for a nonexclusive license to technology and patents.
October 30The judge approves the sale rules over objections from about 40 states. The written order follows on November 4.
November 14Last day to name another opening bidder.
November 18Deadline to object to the sale, 4 pm ET.
November 19Meeting of creditors, 1 pm ET.
November 24Bids are due, noon ET. Many older articles still say November 20.
November 25Qualified bids are named.
December 1Auction, held only if a rival qualified bid arrives.
December 3 and 4Sale hearing, where the judge decides whether to approve the sale.
December 17Last date to close the sale.

Checked November 5, 2026 against the court docket and Character.AI's own update. Dates can still move.

What could happen next?

There are two broad outcomes, and nobody knows yet which it will be.

A buyer for the platform. Someone bids for the app, the brand and the users and keeps it running. News reports of the October 30 hearing say the company's investment banker testified that buyers had shown interest in the chatbot platform. No such buyer had been named publicly when we checked.
No buyer for the platform. Disney's license goes ahead and the service is wound down. The company told the court: "If such offers are unavailable, or if the transaction with Disney is not approved, Character's platform will be wound down."

As of November 5, 2026, no shutdown date, feature removal date or data deletion date has been announced. The bid deadline is November 24, and the sale hearing is set for December 3 and 4.

What happens to my chats and personal data?

Nobody knows yet. Your chats, characters and account data are not part of Disney's bid, and no filing we have read says whether they would be sold to another buyer, kept, or deleted in a wind down.

Two groups have pushed on this. The US Trustee, the Justice Department office that oversees bankruptcy cases, objected that customer data, including minors' data, cannot be sold without a consumer privacy ombudsman, an independent reviewer. Attorneys general from about 40 states and DC asked for the same, and listed conditions for any buyer, including letting people see and delete their data before a sale.

At the October 30 hearing the judge strongly encouraged an ombudsman but did not order one, and none had been appointed when we checked. The revised sale notice says Disney's assets exclude personally identifiable information. Users are not creditors in the case: notices reach them through the platform or email, the company blog and the case website.

What can I do now?

Request your data export, because it is slow, and copy anything you made by hand.

Request the export
On the web: Profile, then Profile Settings, Account, Manage Account and Data, Export Data. In the app: Profile, then Settings, Legal and Privacy, Export Data.
Wait for the email
Character.AI says the export can take 3 to 4 weeks. The link goes to the email address on your account.
Download it within 7 days
The link expires 7 days after the email is sent. Keep a second copy of the file.
Keep your account until then
Deleting your account before the file arrives loses what was in it, and deletion cannot be undone.

Our guide to exporting your Character.AI characters and chats shows how to copy your characters, personas and chats, and what cannot move. If this news is hard to take, that is normal when something you care about is uncertain. You do not have to decide anything today.

What if I am looking for somewhere new?

There is no rush. Character.AI is still running, and your export works either way. If you are an adult and want to try another app, compare a few on what matters to you: memory, price, rules on mature content, voice, and whether you can rebuild the characters you made.

Nodera is one option: a free web app for adults, where characters remember you and you can recreate a character you made in a few minutes. Our Character.AI alternative page says plainly where Nodera fits and where another app may suit you better.

Questions people ask

Is Character.AI shutting down?

Not as of November 5, 2026: the app is running and no shutdown date has been announced. The company says the platform will be wound down only if no workable bid to keep it running is found, and the court decides on the sale at the sale hearing, set for December 3 and 4.

Did Disney buy Character.AI?

No. Disney's $20 million is an opening bid for a nonexclusive license to Character.AI's technology and patents. It does not include the app, the brand, accounts or user data, and the court still has to approve any sale.

Will Disney get my chats?

Not under its current bid, which excludes user data, chats and characters. What happens to that data if another buyer appears, or if the platform winds down, has not been decided, and states and the US Trustee are pressing for an independent privacy review.

When will we know what happens to Character.AI?

Bids are due November 24. If a rival bid qualifies there is an auction, and the judge decides at the sale hearing, set for December 3 and 4. These dates have moved before and can move again.

Will my Character.AI subscription keep working?

For now. The company says subscriptions remain active and billing is unchanged, and that it intends to tell subscribers in advance if paid features change.

Can I still delete my Character.AI account?

Yes. The company says you can delete your account or export your data through the app or the website. Request and download your export first if you want a copy, because deletion cannot be undone.

Do I need to do anything in the court case?

Most users do not: the company told the court that users are not creditors. The case documents are public on the Stretto case site if you want to read them.

Sources

Changes to this page

November 5, 2026: Published.

Nodera facts are from the app as of November 5, 2026. Spotted something out of date? Tell us on Discord.

Nodera is an independent app and is not affiliated with, endorsed by or sponsored by Character Technologies, Inc. or Disney Enterprises, Inc. Character.AI and Disney are trademarks of their owners, named here only to identify those services.

The Character.AI bankruptcy: what happens to your chats and characters