1. Check the Steam Data Folder: While sometimes the steam cloud can be the very thing to cause the issue, it might also be the very thing that ends up saving you. Navigate to C:\Program Files (x86)\Steam\userdata\STEAM ACCOUNT NUMBER\105600\remote (the steam account number is going to be a collection of random numbers and it will be different for each person. Most likely you will only see one folder so click whichever one shows up.) and see if your files are there.
If this did not solve your problem, or it does not apply to you move to step 2
2. Recover your files from the .bak files: Located in Terraria's default save location which is \Documents\My Games\Terraria you should see a worlds and player folder. Click on whichever folder that applies to you and see if there are any .bak files of your old or missing characters. Simply rename the file extension to .plr if it is a player file or .wld if it is a world file.
If this did not solve your problem, or it does not apply to you move to step 3
3. Revert to a previous version: Sometimes when your character or world gets corrupted the file remains in it's respective default save folder but is simply unusable by the game. You can revert to an earlier version of the file so that you don't lose ALL your progress. Using this method some of your progress will still be lost. First navigate to either \Documents\My Games\Terraria\Worlds or \Documents\My Games\Terraria\Players depending on what kind of file was corrupted. Right click the file and select properties. Now select the "Previous Versions" tab and see if anything is there. If so select the version you wish to revert to, click it, and then click restore.
If you are using Windows 8 or 10 then previous versions won't be available unless you enabled it beforehand.
