IMO, those tires are way too close to the fenders.
Assume factory configuration, its appears the leaf spring packs have lost some of their "load support" ability (due to their older age). Suggestion: Replace all 4 x leaf spring packs. If desired, go "next size up". Replace shackles and Yoke (since their bolt holes are probably over from wear) and re-assemble with new plastic bushings / lots of grease. If the tires still look too close to the fenders (when trailer frame is level to ground), then simply re-configure using leaf spring packs "over" the axle. Thus, creating a 3.5" frame lift (and creating more air gap within the tire wheel wells). After this is done, connect to your Tow Vehicle using Properly sized draw bar. Always get trailer suspension in perfect order - before sizing to its connected Tow Vehicle.
While replacing leaf spring packs (if they are older than 15 years), do detail inspect its braking system as well. If needed, replace older age parts in this area as well. For example, install new / thick 10 gauge wiring on full electric brakes, ensure all connections are sealed, etc. etc.
If wondering, I did a leaf spring "over" axle conversion on my boat trailer and love it. One of the best upgrades I've done to it.