I got myself into a real mess. I had wall paper on my walls and it came off really hard. I have quite a few nicks that I need to repair. That isn't the problem though. Under the wall paper was what looks like a really BAD paint job. It is flaking and coming off. There are areas that I can take a putty knife too but other area that the paint is sticking too good. My question is if I need to remove all the paint before I patch and skim coat the walls or if I can just sand the paint where it is already flaking and then patch/skim coat.

PS I tried to peel the paint on one section of the wall and ended up having to dig out the entire joint seem and then redo it. I don't want to do that to the rest of my house!

Take a sanding sponge and lightly sand area. Apply a coat of Gard Z from Zinsser(this product will keep the drywall paper and old paint from bubbling) apply a skim coat of mud, two if needed, prime & finish paint.

Good Luck