Kevin Cooper always wanted to build homes.

He started working in construction with his dad when he was 12, picking up scraps from the job site.

“I started out, literally, at the bottom,” said Cooper, a Des Moines-area builder who owned his mostly custom-construction business for 10 years. He built 10 to 15 homes a year before filing for bankruptcy in 2011.

Cooper ran into financial trouble when three home sales fell through. “All the money I made over the last 10 years was gone. I lost everything.”

Even though Iowa bankruptcies tumbled 19 percent last year from 2010, some attorneys are unsure the state’s return to 2008 bankruptcy levels means money problems are behind Iowa businesses and consumers.

“I fear that this dip might just be temporary,” said Don Neiman, a Des Moines bankruptcy trustee. “Those companies that have tried to hold on and continue to operate are being forced into bankruptcy.”

The impact is especially being felt in the construction industry.

Iowa’s recession began with the fall of the state’s largest homebuilder, Regency Cos., and has continued over the past three years. Regency President James Myers filed for personal bankruptcy in 2009, believed to be the state’s largest with $184 million in liabilities, until developer Jon Garnaas filed late last year.

Garnaas and his wife, Faith, listed $457.6 million in liabilities and $1.1 million in assets.

“Some banks are still in trouble,” Neiman said. Those problems result in longtime customers being asked to move their credit lines to other lenders, often at the direction of regulators.

“That’s always been tough, but more so now because of the credit restrictions,” Neiman said.

The residential and commercial construction industries have taken a beating since the recession hit the nation in late 2007 and Iowa a year later.

Total U.S. construction spending plummeted 31 percent from $1.15 trillion in 2006 to $803.6 billion in 2010.

Data through November show that construction spending was projected to bump up to $807.1 billion in 2011. Spending is expected to increase 3 to 6 percent this year, according to the Associated General Contractors of America.

Iowa lost 14,500 construction jobs through the recession, a 19.4 percent drop, and has regained only 3,400 jobs from the downturn’s low.

Brandon Young, Miller the Driller’s vice president of operations, said filing for bankruptcy provides no instant solution to a company’s financial difficulties.

The longtime Des Moines underground trenching company sought bankruptcy protection last year while it worked to reorganize.

The company’s lender resisted, saying the business’s revenue failed to support the move.

“A year later, our gains have been minimal,” said Young, who is still trying to reorganize the family-owned business, including a possible merger with another company.

“We’ve experienced downturns before, but this one was so much more severe,” said Young, whose business has been in operation since 1948. “Lending institutions are very edgy. Everyone is trying to mitigate risk. It’s a difficult environment.”

Consumer bankruptcies showed the largest decline last year, down nearly 20 percent over 2010. Business bankruptcies fell nearly 7 percent.

“A lot of us are scratching our heads,” said Michael Mallaney, a West Des Moines attorney.

“The economy has improved, but not enough to warrant that kind of reduction.”

One reason might be that consumers are more willing to live with the debt and the collection calls, said Mallaney.

Another possible reason: Some credit card companies and banks might now be more willing to work with borrowers deep into the recession and recovery.

Some creditors are taking lower cash settlements or agreeing to lower interest rates and restructure debt and payment plans, said Mallaney. “I see it more so than I did in the farm crisis,” he said. “Maybe we’ve gotten smarter.”

Jeffrey Goetz, a Des Moines attorney who specializes in bankruptcy reorganizations, said the fall of large developers and builders can ripple through the economy, hitting subcontractors such as painters, framers and landscapers.

“It takes a village to build a village,” Goetz said. “The big guy might not file for bankruptcy, but we’re seeing the second tier of contractors struggling to reorganize.

“We’ve seen a lot of shakeout. It has a domino effect,” he said.

The downturn’s impact hit Cooper. He said his lender tried to work with him after one buyer of a custom home moved outside Des Moines, another lost his job of 26 years and got divorced, and another, under the gun to move, decided against buying.

He said their $10,000 deposits didn’t go far against the debt on the $300,000 homes. “You never would imagine someone walking away from $10,000,” he said.

Cooper had difficulty finding new buyers for the homes, built to the would-be owners’ specific tastes. “One guy wanted yellow siding with white trim. To me, it looked like a banana split,” he said. “It’s not what everyone wants,” especially in a market with few buyers.

Cooper said he’s thankful he has cobbled together two part-time jobs after his business, KMC Construction, closed. He’s working as a foreman for another builder and selling flooring.

“I can come close to paying our bills,” said Cooper. He and his wife, Jan, have no health insurance.

The bankruptcy has created some family friction as well, including causing difficulties for his two sons, who worked for him.

“I feel like they were looking to me to captain the boat,” Cooper said, “and I steered it into an iceberg. You can take only so many beatings before you have to throw in the towel.”

At 57, Cooper is faced with rebuilding his life and credit. “It’s no clean sweep. It’s taken nine months to just get a debit card,” he said. “Hopefully, things will be different a year from now.”