Brittany Higgins has been declared bankrupt in a federal court hearing brought on by her former boss Linda Reynolds.
The former-Liberal senator launched the legal action after winning a defamation case against Ms Higgins earlier this year.
Ms Reynolds is pursuing her former staffer for the costs for her legal action, estimated to be in the millions.
Federal Court Justice Michael Feutrill delivered his judgement on Friday in Perth, where he made a series of orders.
The court heard Ms Higgins estate must be sequestered under the bankruptcy act, with a copy of that order to be served to her trustee within seven days.
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