A federal judge dropped Rudy Giuliani's bankruptcy case Friday, dealing a huge financial blow to the Donald Trump ally as he faces mounting punishments relating to his 2020 election advocacy.

The former New York mayor filed for bankruptcy after he was ordered to pay $150 million to two Georgia election workers whom he said committed voter fraud.

The ruling allows Giuliani's creditors to go after his assets. Giuliani is also now free to appeal the staggering judgment.

"We will continue to pursue justice and we are confident that -- in the long run -- our system of justice will be restored and the mayor will be totally vindicated," his spokesperson Ted Goodman said.

Giuliani bankruptcy case dropped

In December, Giuliani was found liable for defaming two Georgia election workers whom he accused of committing voter fraud.

Their lawyer had argued that Giuliani's bankruptcy case should be dismissed because he was using bankruptcy as a "bad-faith tactic" to avoid paying his creditors.

The judge had signaled during a Wednesday hearing that he was leaning toward dismissal, and on Friday he handed down his ruling.

U.S. Bankruptcy Judge Sean Lane declared Giuliani a "recalcitrant debtor" who refused to be transparent about his money. The lawyer for the election workers, Rachel Strickland, hailed the decision.

“Ruby Freeman and Shaye Moss have already waited too long for justice,” Strickland said. “We are pleased the court saw through Mr. Giuliani’s games and put a stop to his abuse of the bankruptcy process. We will begin enforcing our judgment against him ASAP.”

Trump ally faces punishment

Giuliani had previously sought a Chapter 7 bankruptcy, which would liquidate his assets.

But shortly before the Wednesday hearing, his lawyer Gary Fischoff said he would support dismissing the bankruptcy case. The administrative costs of a liquidation would "consume if not 100%, a substantial portion of the assets," he said.

The bankruptcy decision is the latest blow for the former New York mayor, who was once celebrated as "America's mayor" for his leadership following the September 11 attacks but has since faced severe punishments resulting from his strong advocacy for Trump.

The Supreme Court of New York disbarred Giuliani earlier in July for spreading "lies" about the 2020 election.

Giuliani is also facing criminal charges in Arizona and in Georgia for his alleged efforts to "overturn" the election.