⚡ Key Takeaways
✓ Character AI's parent company filed for Chapter 11 on October 12, 2026 and is selling itself through a court-supervised process. The app is still online and paid plans are still billing.
✓ Disney is the opening bidder at $20 million for a non-exclusive license to some of the company's technology. That is a price floor, not a takeover of the app, and other buyers can top it.
✓ Nobody has said whether your chat history is part of the sale. The privacy policy allows user data to be disclosed in a sale, and a coalition of state attorneys general has raised the issue in the bankruptcy case.
✓ Export requests are reported to take three to four weeks. Ask today and the file lands between about November 25 and December 2, right around the proposed November 24 sale hearing.
✓ Export first, delete later, and cancel any subscription separately. Deleting your account does not stop billing.
Update log
If you have chats, custom characters or a Character AI Plus subscription on Character AI, the bankruptcy news probably raised one question: what happens to all of it? The honest answer today is that several things are still unknown, and a few of them depend on a court hearing three weeks away.
This guide separates what has been reported from what nobody has said yet, lists the dates that matter, and walks through what to do now. It also covers a side of the story most coverage skips: what the sale means if you used the app for private, romantic or emotional conversations.
What Happened, in Plain English
On Monday, October 12, 2026, Character Technologies, Inc., the company behind Character AI, filed for Chapter 11 protection in the US Bankruptcy Court for the District of Delaware (Case No. 26-11603). Chapter 11 is a reorganization process. The business can keep operating while it looks for a buyer or a restructuring deal, so a filing is not the same thing as a shutdown.
The company blamed legal, regulatory and operational pressure, and said its board chose a court-supervised sale as the best way to protect value for stakeholders. Coverage of the petition puts both assets and liabilities in the range of $50 million to $100 million. State officials have cited more than 20 million monthly users, though the company's own coverage only says "millions".
The filing follows a difficult stretch. In October 2025 Character AI announced it would end open-ended chat for users under 18, one of several safety changes made while it faced lawsuits over teen safety. Its former CEO, Karandeep Anand, was hired by Disney as chief technology officer in September 2026.
The Dates That Matter
Most of the sale timeline comes from the company's proposed bidding procedures, which a judge still has to approve. Treat everything marked "proposed" as a plan, not a guarantee.
| Date | What happens | Status |
| Oct 12 | Chapter 11 petition filed in Delaware | Filed |
| Oct 15 | State attorneys general file a notice in the case | Filed |
| Nov 9 | Deadline to name any additional "stalking horse" bidder | Reported |
| Nov 13 | Objections to the sale due | Reported |
| Nov 18 | Deadline to object to contracts a buyer may take over | Proposed |
| Nov 19, 1:00 p.m. ET | Meeting of creditors, held by Zoom | Court notice |
| Nov 20, 5:00 p.m. ET | Bid deadline | Proposed |
| Nov 23 | Auction, if more than one qualified bid arrives | Proposed |
| Nov 24 | Sale hearing | Proposed |
| Nov 30 | Target for a sale order under Disney's deal | Reported |
| Dec 17 | Closing target and outside date | Reported |
Two outlets give slightly different dates for the objection deadlines, which is common while procedures are still proposed. The company itself says it expects a sale by late November or early December. The case number above is the one to search on the court's public docket if you want the latest.
Is Character AI Shutting Down?
Not today. The service is running, you can chat, and the company says paid subscriptions remain active.
There are two broad outcomes. If a buyer takes the business, the service could continue under new ownership, though nobody has published what a new owner would keep. If no buyer agrees to keep the service running, the company has said the platform will be shut down.
Which of those happens is not public. The coverage we reviewed names Disney as the only bidder and does not name anyone interested in running the consumer app. We are not going to guess. What you can control is how much of your own data you hold before the answer arrives.
What Disney's Bid Does and Doesn't Mean
Disney Worldwide Services is the "stalking horse" bidder. That means its offer sets the opening price that rivals must beat. According to the company and reporting on the filing, the offer is $20 million for a non-exclusive, perpetual license to some of Character AI's intellectual property, plus certain legal claims, with transition support from former Character AI employees that Disney has already hired. A case summary of the filing puts the minimum overbid at $21.7 million.
Three details matter for users:
What Happens to Your Chats and Characters
Here is the clearest way to read it: some things are on record, and several important ones have not been said.
| What is on record | What nobody has said |
| The company says your data "continues to be protected" under its privacy policy and that its practices are unchanged. | Whether chat histories are among the assets being sold. |
| That policy allows user information to be disclosed in connection with a sale of the company or its assets. The language has been in place since at least August 2025. | Whether a buyer must follow the same privacy terms. |
| The policy lets the company keep some information after you delete an account, and public characters can stay active after the creator's account is gone. | What happens to chats and characters if no buyer is found. |
| A judge can appoint a consumer privacy ombudsman in a sale like this. As of mid-October nobody had asked for one. | Whether you will be able to delete your data after a new owner takes over. |
For context, a privacy expert quoted in coverage called the ombudsman protection weak because many privacy policies carry sharing exceptions. In the 23andMe bankruptcy, states pushed for an ombudsman and one was appointed, but that company's policy had promised its privacy terms would carry over to a buyer. Character AI's policy does not say that.
The State Attorneys General Filing
On October 15, Virginia and a coalition of other state attorneys general filed a notice in the bankruptcy case. They raised concerns about the company's safety and privacy practices and asked for protections for children and consumers in any sale.
Two points stand out. First, they argued that the company's recent limits on minors are not legally required and could be loosened by a future buyer. Second, they flagged the personal data the company holds, including conversations about mental health, relationships and emotional struggles. They reserved the right to challenge any proposed sale or plan. Virginia's attorney general, Jay Jones, said bankruptcy "cannot be an escape hatch from responsibility."
The coverage we reviewed named Virginia but not the other states. None of this decides the outcome. It does mean the data question is being argued in court, not just in comment sections.
How to Export Your Chats (Step by Step)
Character AI says users can export their data or delete their account through the app or website. The exact menu path below comes from reporting that cites the company's help center, and menus change, so if you cannot find it, search the help center for "data export".
Subscriptions and Character AI Plus
The company says paid subscriptions remain active and billing is unchanged, and that it intends to notify subscribers in advance if changes affect paid features. We found no statement about refunds or about how prepaid balances would be treated, so we will not guess.
Deleting an account does not cancel a subscription, and the two are separate steps. If you pay through the Apple or Google store, you cancel there. Whether to keep paying while the future is unresolved is your call. If you prepaid for a long plan, ask your payment platform about its refund route.
If You Used Character AI for Romantic or Emotional Roleplay
Character AI has long restricted sexually explicit content, but many people used it for flirting, romance, venting and private storytelling. That is exactly the kind of material state officials singled out as sensitive.
Until the company or a court says otherwise, it is reasonable to assume anything you typed could be disclosed in a sale under the existing policy. That is not a prediction that it will be. It is a reason to decide, calmly, what you want to keep.
If losing a character or a long-running conversation is hitting harder than you expected, that is common and worth taking seriously. Talking to a friend or a professional can help, and you are not overreacting.
Where Users Are Going
This section is for adults only. If you were already looking for fewer restrictions than Character AI allows, these are the three alternatives we cover most. Prices come from our tool directory and checkout prices can differ, so check before you pay.
For the full ranked list, see our Character.AI alternatives page and the Character.AI NSFW alternatives guide. For a head-to-head, read CandyAI vs Character AI. Whatever you pick, read its privacy policy and check how to delete your data before you start typing.
Your Checklist Before the Sale
What We Are Watching
The next dates that could change this guide are the bid deadline on November 20, the auction on November 23 if rival bids arrive, and the sale hearing on November 24. We will also watch whether anyone asks the court for a privacy ombudsman and whether a buyer says anything about chats and user characters. When any of that moves, this page gets updated and the update log at the top shows what changed.
How We Checked This
This guide is built from press coverage that cites the company's statements and the court filings, including reporting from CBS News, Decrypt, Straight Arrow News, Tom's Guide, WAVY and PPC Land, plus a public case summary. We did not read the court docket directly, so please check anything marked "proposed" against Case No. 26-11603 before you rely on it. Written by John Maurin for Xchatbots. Some links on this page are affiliate links. They never change which tool we pick. Full methodology: how we review.
FAQ
Is Character AI shutting down?
Not at the moment. The app is online and paid plans are still billing. The company is selling itself through Chapter 11, and it has said the platform would be shut down if no buyer agrees to keep it running. It expects a sale by late November or early December.
Can I still use Character AI right now?
Yes. You can still chat and use your characters. The company says it will notify subscribers in advance if changes affect paid features, but a buyer could change things after a sale.
What happens to my chats if Character AI is sold?
That has not been said. The privacy policy allows user data to be disclosed in a sale, and the filings reported so far do not say whether chat logs are among the assets. A coalition of state attorneys general has asked for consumer data protections in any sale.
How do I export my Character AI chats?
Use the Data Export option in your account settings on the website, or under Legal and Privacy in the app. Reporting that cites the help center says the file takes three to four weeks to arrive. Request it as early as you can.
How long does the export take?
Reports say three to four weeks, and the emailed download link expires after seven days. If you request today, expect the file between roughly November 25 and December 2.
Should I delete my Character AI account?
Only after your export has arrived and you have saved it. The privacy policy lets the company retain some information after deletion, and public characters can stay active, so deleting is not a guaranteed wipe. Deleting does not cancel billing either.
Will I get a refund on my Character AI Plus subscription?
We found no statement about refunds. The company says billing continues as normal. If you pay through Apple or Google, check that store's refund process, and cancel there if you no longer want the plan.
What is Disney actually buying?
Disney is the opening bidder for a non-exclusive, perpetual license to some of Character AI's technology and certain legal claims, for $20 million. Reporting does not describe it taking over the chat app or user data. Other bidders can still beat it.
Will my custom characters disappear?
Unknown. If the service continues under a new owner, characters may stay, but nobody has confirmed that. If no buyer is found and the platform shuts down, you should assume they will not survive. Copy your character definitions now.
What are good Character AI alternatives for adults?
It depends on what you want. CandyAI, Joi AI and OurDream AI are the three we cover most for adult roleplay. Our Character.AI alternatives page compares more options.