It may be possible to erase bad memories

A growing body of evidence, dating back to the late 1960s, suggests that we can lessen the emotional blow of negative memories (and even get rid of them altogether) months and years after those memories originally formed. The key is that memories seem to be vulnerable to manipulation and erasure as you're recalling them, not just at the time of creation. The newest research — and some of the most convincing to date — used electroconvulsive therapy to effectively remove the details of traumatizing stories from the minds of healthy volunteers. Virginia Hughes has a story about the newest study at her blog:

Schiller’s experiments have also bolstered the reconsolidation hypothesis. She has shown, for example, that if people recall a fearful memory and then go through ‘extinction learning’ — meaning that they’re shown the fearful stimulus over and over again without any pain — they can erase the emotional sting of the memory. Other groups have shown something similar by giving people propranolol, a beta-blocker, immediately after recalling a memory.
The new study adds ECT to the list. There are still a lot of questions. For example, it’s not clear how ECT is disrupting reconsolidation. Or if it’s doing it at all: The effect could be partly or wholly due to anesthesia, though the researchers say this is unlikely. Most importantly, no one knows whether the procedure would work with old, real memories, as opposed to those artificially created in the lab.