I had a mate go through a similar experience as you Nino. Since then i have signed up to dropbox, $120 a year is VERY cheap insurance when compared to data recovery costs. Plus dropbox being accessible anyway has been very convenient.  I have around 700GB on dropbox, although it did take quite a few months of hitting my uploaf limit to get it all there. Now, every single file on my computer is instantly synched with dropbox

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That's what I'm looking at using - I used to use Cloud storage in the "early days", but security was very poor.

Don't format and reinstall
Buy a new hard drive and leave the old one asis

It is one physical disk and it had bad sectors only on the OS "C Drive". The access time to the other partitions was very poor. The only way to fix was a low level format, OS install and give that PC to the kids to much around on. All the data was safely retrieved to the new external drive - which died.