You are supposed to receive notice of the sale. However, as you cannot depend on this, you can keep checking with the court at the clerk where the foreclosure proceeding is.
If you file a Chapter 7 yourself, it will cost you a $299 filing fee.
Yes - since you have nonsubstantial assets, you can voluntarily dismiss your Bankruptcy case at any time.
To file a Bankruptcy, you have to fill out a 60-page application, but filling out the application is not as ominous as it may seem, because there are about 30 pages that remain blank, or need only one check mark. You should be able to get the application from your local Bankruptcy court.
There is no penalty for dismissing your case.
However, you will not be able to keep your credit cards, even if you dismiss the case. Credit card companies cancel all credit cards upon a Bankruptcy filing, even if the cards are not in default, and even if they have no balance. This has nothing to do with the Bankruptcy court - it is the policy of the credit card companies.