Not to revive an 8 year-old thread from the dead or anything, but is there a "so fucking what" option? I don't see why anyone should embarrass themselves by jumping through hoops to deny something when it's A) true and B) not even objectionable by most people's standards. I've had a Sim get accused of having a child out of wedlock, and as someone whose parents have never been been married I'm pretty sure it's not the 1950s anymore.

IMO the disgrace system isn't too different from the way celebrity tabloids work- the only thing I would probably change is to reduce the negative impacts it has on relationships and mood, and have it mainly affect the celebrity level.

Think about it- you hear about Johnny Depp's money problems nowadays and think a little less of his celebrity status, but you'd still treat him normally if you ever met him.