What is the procedure for getting a council house? Being evicted?

If you are disabled and have done nothing wrong, you are protected by the ADA (Americans with Disabilities Act) from any kind of discrimination. You should go to any defensive legal aid for tenants (every city has several) to give you a Fair Housing booklet and advise you properly because the Federal laws give you rights that clash with traditional Landlord Tenant disputes. But it sounds like the law is on your side. The only caveat to all the above is if you are living in the house that is being repossessed then there is nothing you can do to stop that , as that is a financial default on the Landlord's part with the bank...and banks get their properties back no matter what. Speak to someone who is in legal aid and is a tenant advocate or in a tenant advocacy group to help you figure out a plan.