Bankruptcy filings are on the rise in Santa Fe County, where the filers include small-business owners who fell into the red, homeowners with unwieldy mortgages and even College of Santa Fe workers forced to take pay cuts.

Add to that mix an actual bankruptcy lawyer and his wife, a paralegal.

Jerold Greenker and Connie Petersen-Greenker came here from Colorado Springs a couple of years ago hoping to start new careers as gallery owners and landlords to vacationers. They dumped a lot of money into inventory and real estate, expecting big returns.

Now they find themselves with a shuttered business, two pending foreclosures — and another statistic in this sour economy.

"I think the irony is more that we thought we could make a go of it in Santa Fe with a gallery and a boutique," Petersen-Greenker said. "The idea that we're comfortable with bankruptcy and understand it, it still doesn't make it easy."

Bankruptcy numbers are nowhere what they were in 2005, just before President George W. Bush signed a bill that tightened restrictions on people hoping to sell off their remaining assets and start over. But the economic downturn is bringing the numbers back up, according to the U.S. Bankruptcy Court. County figures rose to 249 last year from 149 in 2006, and statewide it went to 4,581 from 2,519.

"People are losing their jobs left and right," said Santa Fe attorney Doug Booth, one of a small number of bankruptcy specialists in town. "We see a lot of small-business owners, people losing jobs and people being asked to take less pay."

Booth and William Ivry, another Santa Fe bankruptcy lawyer, said they have listened to countless emotional tales of people fighting off creditors. A lot of them are in credit-card debt, and others are downtown business owners or CSF workers.

"My business is kind of out of control," Ivry said. It's "busier than ever because a lot of lawyers quit doing (bankruptcies) when the law changed."

Ivry said he sometimes gets five to seven calls a day from people thinking of filing bankruptcy, and his appointments are booked nearly a month out. He has helped five to 10 retailers in the last six months declare bankruptcy, and he sees a lot of contractors and subcontractors.

"And there's a lot of starving artists out there," Ivry said. "Their art's not selling in galleries, and they gotta pay their bills."

About 80 percent of Ivry's business comes from people who lost jobs, got divorced or face hefty medical bills. Most people who qualified for Chapter 7 bankruptcy before the legal change would still qualify, although people who make too much money generally need to go the Chapter 13 route.

Chapter 7 allows people to completely wipe out their unsecured debt — such as credit cards and medical and utility bills — while Chapter 13 requires debtors to pay off some of what they owe over a five-year period. Most Chapter 7 debtors can keep all of their possessions, Ivry said, although in certain cases bankruptcy courts can seize assets that are sold to pay creditors.

Petersen-Greenker said she and her husband saw declaring bankruptcy almost purely as a business decision. They used to tell their clients in Colorado to view it the same way.

"Chapter 7 creates a clear, new place to start so your new credit can start again," she said, adding with a laugh, "It's better than going to debtor's prison."

The couple, who are representing themselves in bankruptcy proceedings, opened a gallery and boutique in the Aldea subdivision, but later moved to Galisteo Street in hopes of landing more foot traffic. Business never picked up, and they had trouble making payments on homes they leased as short-term rentals to vacationers, including an $850,000 house in La Tierra and another $700,000 house in Sol y Lomas. Both are in the foreclosure process, and the couple already had a large Victorian home in Colorado foreclosed, Petersen-Greenker said.

Bankruptcy Court records say the couple, who now rent a home near Yucca Street and Rodeo Road, had about $1.4 million in assets and nearly $2.3 million in debts.

Both are 58 and nowhere near able to retire, Petersen-Greenker said, but Greenker recently joined the New Mexico bar and is trying to drum up clients, his wife said.

"It took us a long time to decide (to file bankruptcy)," Petersen-Greenker sad. "We thought the store would survive but that maybe some of our real-estate interests wouldn't survive, so we had all kinds of contingency plans.

"I just think we're entrepreneurial in personality, and that's what we did."

BANKRUPTCY FILINGS

Santa Fe County

2008: 249
2007: 177
2006: 149
2005: 782
2004: 519
2003: 536
2002: 528

New Mexico

2008: 4,581
2007: 3,402
2006: 2,519
2005: 12,424
2004: 9,519
2003: 9,782
2002: 9,282

Source: www.nmcourt.fed.us/usbc/statistics