The Federal Court has ruled the Health Services Union can continue to prosecute the case against former national secretary Kathy Jackson despite her bankruptcy declaration earlier this week.

Her trial is scheduled to go ahead next Tuesday and she has denied any wrongdoing.

Ms Jackson was not in the court for the decision.

The union has accused Ms Jackson of misappropriating more than $1.3 million in funds and is suing her for $2.5 million.

Ms Jackson has been fighting the case's continuation, declaring last year she was too mentally unwell for it to proceed.

She then declared bankruptcy earlier this week as the trial was due to get underway.

Lawyers for her receiver appeared in court in Sydney today and did not oppose the trial continuing.