Since you say the home has already been sold, there must have been a judgment entered against you. That judgment would have included an order for possession of the property. To enforce that order the new owner only needs to ask the sheriff to act upon the order. You should either agree to lease the property or move out immediately.
Before I can answer that question accurately, I need to know which credit score you are evaluating. Are we talking about your FICO score, Vantage Score, or your score from one of the consumer reporting agencies. If you're not sure, let me know how and where you obtained the score.
Current Indiana law holds that even as to fraudulent representations, a purchaser has no right to rely upon the representations of a vendor as to the quality of the property, where he has a reasonable opportunity of examining the property and judging for himself as to its qualities. So the short answer to your first question is "probably not." The answer to your second question is also "probably not." This is because to have any chance of prevailing you would likely need to bring this...
You can dispute that inquiry directly with the consumer reporting agency that furnished the report. If it was Trans Union, Equifax or Experian, you can submit that dispute online or may regular mail, phone or fax. The federal law which governs when an agency can furnish a credit report is the Fair Credit Reporting Act, specifically 15 USC 1681b, not the Fair Debt Collection Practices Act. If your report was furnished without a permissible purpose, you may have claims against the consumer...
I am currently representing another consumer who also faced inaccurate reporting by Sterling and on whose behalf we have filed claims under the Fair Credit Reporting Act. Depending upon the particulars of your case, I would say there is a chance the FCRA has been violated.
Unfortunately, I believe the answer to your question is "no." You may have accepted responsibility for it between you and your son but that acceptance did not make you the responsible party as far as the creditor was concerned. In other words, it remained your son's obligation to pay. That it is now reported on his credit report is accurate and there is no legal way to remove accurate information from a credit report.
The only way something like this would end up on your credit report is if Wal-Mart files a lawsuit and obtains a judgment against you. The judgment would then be part of the public record and would be reported to the consumer reporting agencies by their public information vendors. So, to keep this off of your credit report you will need to successfuly defend against any action Wal-Mart may bring related to this incident.
Sounds like you were never properly served and, therefore, could move to have the default judgment set aside. As for garnishment, they would not be able to garnish your wages earned in NC without first "domesticating" their default judgment in the NC county in which you reside.