Salim Mehajer declared bankrupt over $200,000 marble work at his home

Embattled businessman Salim Mahajer has been dealt another blow after the Federal Circuit Court declared him bankrupt today.

Liquidators for Mr Mehajer's failed property company brought the bankruptcy proceedings over a $200,000 debt owed for marble work at his elaborate Lidcombe home.

The decision means a trustee will now take control of his multi-million dollar estate to pay a range of creditors including Prime Marble & Granite and the tax office.

Legal costs of more than $20,000 will also have to be paid out of the estate.

Prime Marble & Granite installed stonework at the home, including an almost $670,000 marble staircase.

Mr Mehajer’s legal team had been trying to have the bankruptcy proceedings dismissed, arguing notices hadn’t been validly served. Judge Justin Smith rejected the argument and allowed the bankruptcy to proceed.

The controversial former Auburn deputy mayor still faces a string of criminal charges and has been in jail since January awaiting trial over allegations he staged a car crash on his way to court for assaulting a taxi driver.

He was arrested with a number of others and now faces charges including conspiracy to defraud and perverting the course of justice