There are different tiers of clothing to be remembered. Some items are precious and will want to be kept intact. Others ... well, let's just say they end up in a bag destined for the Salvation Army. Yet there are repurposing options. One of my favorites is a twined rug, as seen here in Ety's jcarlo shop.
This is especially nice for those items that seem impossible to keep. From comforters to polyester clothing, the things that are challenging to storage space or to aesthetic sensibilities.