Sarah Ferguson has said that she first got caught up in the cash-for-access scandal because she was trying to help out a friend in need.
In an interview with Oprah Winfrey, the Duchess of York revealed that she became embroiled in the sting because she wanted to assist an unnamed friend who "needed $38,000 (£28,000) urgently".
But, she admitted that financial desperation prompted her to ask for even more money and led her to request £500,000 for herself.
"I was so out of control with desperation where I'd reached the point of no return," the 50-year-old told the chat show host.
During the interview, which aired in the States on Tuesday, Sarah was played the video of the sting, which she had never watched in its entirety.
"I feel sorry for her. She looks exhausted," she said as she watched the clip, referring to herself in the third person.
Sarah, who appeared close to tears during the segment, confessed that she is now considering filing for bankruptcy having racked up huge debts by living beyond her means.
"I think I've been living trying to be the Duchess of York," she said. "It's so difficult to explain. Living beyond my means? Yes. Trying to keep it up, keep me up, keep Sarah going."
She refused to reveal how much she had received in her divorce settlement from Prince Andrew, but she did admit she had chosen "friendship with the family."
"I wanted friendship with the boss," she added in reference to the Queen.
The royal said she had decided to sit down with Oprah in order to embark on a fresh start, saying of her part in the scandal: "There aren’t really many words to describe an act of such gross stupidity."
She did reveal that she has been helped through this difficult time by her two children, Princesses Beatrice and Eugenie, who told her: "We're 100 per cent here for you and we love you."
And while she didn't go into detail about her ex husband Andrew's response to the scandal, she did say that he had "reached out with understanding."