Jewel, 37, was ordered to pay more than $20,000 to Patrick Kedemos, plus 6 per cent interest and legal fees, in Perth Magistrate’s Court on Friday.
Investment banker Kedemos says that he loaned the amount to Jewel last year out of sympathy.
According to emails that formed part of the application, Jewel initially offered Kedemos a part payment plan of $250 a month.
Jewel cited "ongoing mental health problems," as well as a debt arrangement with two other creditors and reliance on her retired parents for financial support as her reasons.
"If Patrick won’t accept a payment plan then I have no choice but to file bankruptcy ... I will start these proceedings on Monday — does Patrick understand if I do that he won’t be paid at all."
Tracey was overseas with boyfriend Nathan Constable when Kedemos filed the application, meaning she was unable to defend it.
The jilted Married At First Sight bride has been posting photos of her trip with Constable on social media.
Tracey and Nathan can be seen dining at a Michelin star restaurant and visiting Disney World resort.
"Hands down the holiday of my dreams," she captioned a photo.
She told Who in January that Constable was her high school sweetheart.
When Nathan Constable asked Tracey out for a coffee in November last year, the flame was reignited.
"It’s nice to come back to something that’s really grounded and real," she said.
WATCH: Tracey Jewel dishes on her new boyfriend.
Jewel announced her retirement from Married at First Sight in December 2018.
"I don't have any regrets but I have certainly had my time on reality TV."
"And I certainly won't be doing [MAFS] again. Once is enough."
Tracey Jewel plans to appeal the judgment, and said she would not declare bankruptcy.