Formatting mac and encrypted memory
I'm a little unclear what your configuration is...
If your "128GB SD" is an external drive: Unencrypt the data, reformat macbook, encrypt data again.

If your "128GB SD" is the drive that you wish to reformat: 
Copy the data to another external drive unencrypted, reformat your drive, copy the data back onto it and encrypt it over again.

Is there anything keeping you from doing either of these?