My Motto: The less paperwork the better. Therefore, just get out there and try the business. If you find there's too much competition, why spend the money on an LLC? But, if it starts to work out and you're making good money and you enjoy the work, consider some form of incorporation to limit your liability and the cleaning business, depending on the type of cleaning could have some pretty heavy liability. Think about the chemicals you are going to use. Could they end up poisoning someone OR allowing someone to think they have been poisoned or harmed in any way. If you go ALL NATURAL cleaners, your liability is decreased. So, you need to logically assess your personal liability. Do you own any assets? If you don't own any real estate or have any major assets like that, your liability is limited just by nature of the fact that a successful litigant can't get any money out of you anyway. But, what are the dangers of that if you're only cleaning somebody's rugs or something like that?
If you do find you have a major liability by asking yourself all these questions, then yes, get incorporated because they can only get the assets of the corporation in most cases. Be careful, everything in the law is subject to interpretation.
Last part of your question. NO, if it doesn't work out, you do not have to file bankruptcy. You merely stop doing business. Bankruptcy is necessary only if you end up with creditors who need to be paid and you have no money to pay them. So, be careful with your finances of the business. Always pay your bills and you will never have to ruin your credit by filing Bankruptcy. Be a good business person. Use your head. Think logically at every point. Try to foresee the major problems and risks in any activity. Limit your liabilities in everything you do. Ask advice as you have done here at all major points in your life.
Wishing you all the success in the world. I knew a someone once who was homeless. Started a little cleaning business and he now has millions of dollars in Real Estate.