Character.ai has begun a voluntary Chapter 11 bankruptcy process to seek a sale under court supervision, with the platform facing closure if a bid supporting continued operation does not materialize. Users can still access every service for now, and paid subscriptions remain active with no current change to billing. The company expects the sale process to finish by the end of November or possibly in early December 2026.
The bankruptcy case is intended to sell all or substantially all of Character.ai’s assets. The company says it hopes to secure a proposal that would keep the platform operating, but will wind down the service if that effort fails to produce a suitable bid. Continued access for users is therefore paired with an explicit possibility of closure, rather than a commitment to keep operating through a completed sale.
For subscribers, Character.ai says it intends to provide advance notification if changes to the service affect features they pay to use. Its current position keeps both subscription access and billing in place while it pursues a buyer through the bankruptcy process.
Character.ai says its handling of user information remains governed by its Privacy Policy, with no changes to its privacy or security practices. Users retain the ability to export their data or delete their accounts using either the app or the Character.ai website.
The company attributes its difficulties over the past year to legal, regulatory and operational pressures, while saying it took steps during that period to maintain and improve the business. Its board chose the sale process after reviewing the available alternatives, judging it the strongest route to preserve value for stakeholders. Character.ai also says the court-supervised approach offers the strongest prospect of maintaining service for users.
The bankruptcy follows earlier changes to access and features: in April, Character.ai said it had expanded age restrictions into additional regions and imposed usage limits on certain features. In a September safety update, it said the previous year’s removal of open-ended chat with Characters for users under 18 remained in effect.
