From PEOPLE Magazine Click to enlarge
On the lush front lawn of Dummer Down Farm in southern England, a chicken named Ruby pecks breadcrumbs out of Sarah Ferguson's palm. Flare, a gray pony, grazes nearby. Except for the BlackBerry Ferguson checks for e-mail now and then, it is a perfectly pastoral scene. And the Duchess of York-yes, she still has the title-looks relaxed and very much at home on the estate where she grew up. But, as she is quick to make clear, Dummer is not her home. "I don't have a home now," says Ferguson, 51. "All my furniture is in storage."

At a moment when the monarchy's fortunes are sky-high, one former royal is trying to bounce back from rock bottom. Ridiculed for years in the British tabs and beset by endless financial woes, Ferguson was caught on tape last May apparently trying to sell access to Prince Andrew. This April she was left off the guest list for the wedding of Will and Kate-despite being the last royal bride before Kate to be married at Westminster Abbey 25 years earlier. She has lost her business, her wealth and her sense of self-worth-but now she is facing her demons head-on in Finding Sarah, a six-part reality show that started airing this month on the Oprah Winfrey Network, to be followed by a companion memoir due June 28. In both she bares her soul to self-help gurus like Dr. Phil and Suze Orman, in search of some explanation for what she calls "my extraordinary self-sabotage." It has been, she says, a painful journey. "Some days my heart is heavy, and I look back and wish everything could be different," she says. "I live every day with regret, and it hurts."

In a candid interview with PEOPLE, Ferguson touched on the many mistakes she calls "my silly, cringe-worthy acts"-but also on her many blessings, chief among them her daughters Beatrice, 22, and Eugenie, 21. Ferguson helped her daughters pick out the outfits they wore to the royal wedding, then left for Thailand, where she vacationed in a jungle villa (she didn't help choose Bea's now-famous Philip Treacy headpiece). But while she opted not to watch the wedding, she did get updates from her daughters by phone. "I didn't expect to be invited, and that's fine," she says of the wedding. "But I felt like I was there with Andrew and the girls."

Her relationship with her family-she remains friendly with Prince Andrew-is one of the few things that hasn't fallen by the wayside. After her divorce from Andrew in 1996, she made millions giving speeches, writing dozens of children's books and serving as a spokeswoman for Weight Watchers. But she blew through it all and was left with massive debts when Hartmoor Inc., her U.S.-based lifestyle and promotions company, folded in 2009. That business was the cause of her recent problems; a source close to Ferguson says at one point she owed creditors $8 million. Still, one friend concedes her past spending habits-frequent trips, fresh flowers and pricey clothes-had been "extravagant." For her part, Ferguson says she rebuffed her lawyers' advice to file for bankruptcy because she wanted to keep paying those who worked for her. "I didn't want to let my peeps down," she says. "So I kept running and doing speaking engagements and other deals. I was continually on a treadmill. And then the disaster happened."

In May 2010 Ferguson had a meeting with an undercover News of the World reporter posing as a businessman. The reporter taped her appearing to peddle access to Andrew. "£500,000 when you can, to me-open doors," she said, before leaving the meeting in a London apartment with $40,000 in a briefcase. "I believed he was genuine, and if he was going to invest in my businesses and be a fellow partner, then he would meet my family," Ferguson maintains. "But that is not selling access. I would never do that."

Still, she admits she took the meeting "when I was emotionally bankrupt. I made a giant mistake, and that's not the person I am, and I shudder at the thought of it." When she discussed the scandal with her daughters, they surprised her by saying they were glad it happened. "They told me, 'Mum, something had to stop.' I was on a downward spiral." Even Andrew, she says, doesn't hold the incident against her (the prince declined to comment for this story).

In the wake of the scandal, the Duchess of Debt, as the tabs dubbed her, has shored up her ledgers. "She did some work, arrangements were made with creditors, Prince Andrew helped and some friends helped," says a source close to Ferguson. Now, she says, "I'm debt-free for the first time since I was 20. It's a good place to be."

Losing nearly everything has given her new perspective on her time as a royal. So does she have any words of wisdom for the newest duchess, whom she has never met? "I don't think I'd be the one to give very good advice, would I?" she says with a laugh. "Besides, Catherine's doing a brilliant job. She looks like she's so calm and centered, and I take my hat off to her."

Today Ferguson stays focused on rebuilding her life. When in England she stays in a room in the Windsor home of Prince Andrew. She and her ex get along so well that "I often ask the girls, 'Do you think Mummy and Papa should get back together again?'" she says. "And they say, 'You're great the way you are now; it's fine.'" Being a mum is "the one job I can safely say I'm happy how I've done it," she says. "My daughters are extraordinary, delightful souls. I'm so proud of them."

There are times, she admits, when being the odd one out in her own family is hard. "I really miss being with them on big outings," she says. "When they all drive off in their hats looking fabulous, I'd love to be with them." Even so, says the duchess, she feels at peace for the first time in many, many years. "I'm healthy, I have great friends, my girls are fantastic-what more could I ask for?" she says. "As Eugenie said today, 'Mum, you fulfilled every girl's dream. You married a prince.' And I said, 'Aren't I the luckiest woman around?'"