Independent Senator Rod Culleton has been declared bankrupt by the Federal Court in Western Australia, which could disqualify him from parliament if it stands, but he has vowed to fight on.
Justice Michael Barker on Friday granted a 21-day stay on the bankruptcy order.
The WA District Court had ordered Senator Culleton to pay former Wesfarmers director Dick Lester $205,536 in 2013 - which has since increased to $280,000 - over unpaid rent relating to a $13.2 million 2009 property acquisition deal that soured.
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"I am satisfied that the respondent debtor committed the act of bankruptcy alleged in the creditor's petition," Justice Barker said.
"None of the various grounds of objection of the respondent debtor are made out."
Senator Culleton was visibly frustrated by the decision and told reporters outside court that he would consider his position.
"We've still got legal avenues so we can appeal," he said.
"I can still stand as a senator and I'll fight it to the end. This is my livelihood, not only for me, but for my children."
Senator Culleton also took a swipe at Justice Barker, saying the experienced judge had sharpened his knives after previously reserving his decision.
"He was pretty quick to use them, he was quicker than my local butcher," he said.
Senator Culleton was elected in the July federal election as a representative of Pauline Hanson's One Nation but recently resigned from the party.
"I feel sorry for Rod Culleton and his family but this was the right ruling. I hope he now acts honourably and steps down with dignity," the One Nation leader tweeted.
