Gee, this sounds familiar.
I'm still flabbergasted that the fact that the information is gone after a reformat comes as a surprise. When you format a partition the tool specifically tells you that all data on the volume will be lost.
Anyway, I also don't really understand why you feel encryption is required here. You know that the config file is just plain text, right? The user can open it and read what it contains at any time. I'm not sure why, if it's OK to be in plain view while the app is installed, it's not OK other times. If you're concerned about securing the data in the config file then shouldn't it be encrypted at all times?