If you empty the Trash, the disk space is not freed up straight away. It won't be freed up until the Time Machine backup completes, because it's held temporarily by Time Machine's “local snapshots” (More info: About Time Machine local snapshots - Apple Support)
To list all local snapshots:
tmutil listlocalsnapshots /
To delete all local snapshots:
tmutil listlocalsnapshotdates / |grep 20|while read f; do tmutil deletelocalsnapshots $f; done
Format the disk first in Disk Utility - MUST be “Mac OS Extended (Case Sensitive, Journaled)” with GUID Partition Map
Seems to take way too long to be worth the hassle.
More info on encrypting disks: http://pondini.org/TM/31.html
dead simple way to turn off encryption!
(of course it will take your computer some time to actually decrypt the volume… )