I was declared BANKRUPT 30th Jan 09 and need to find a house to rent with my 2 children. Council advised me they wont help unless they can see i've took reasonable steps. I have 4 weeks to house myself & 2 children under 3 with my budget & the only place I could find in my budget is with a letting agent who arranged a credit check & I told them about the Bankruptcy but obviously they failed me. There are no properties in the area with private landlords that are within my price range (although very nice) HELP!!
I assume you are in a mortgaged property at present.
All councils operate differently but with your lack of funds the best bet may be to stay put until you are actually evicted.
In any other scenario the council could claim that you have made yourself voluntarily homeless. Make sure the council are aware of the eviction date and that you will be on their doorstep with your children and all your worldly goods on that date.