Did you ever get this straightened out? In S.C., when you sue a public entity that is generally covered by the SC Tort Claims Act. This provides for a shorter statute of limitations and, at least in negligence situations, a higher level of proof. You may have a case, depending on the truth (or falsity) of the statement, your ability to prove that you did not get employed because of the information, and the degree of fault on the part of the school.
In general, a judicial foreclosure will be reported on a credit report for 10 years, as will a bankruptcy. Unfortunately, his signing over the properties by deed will not change his liability for the debts if he remains on the notes.