HAWAI'I KAI — Years of unfettered spending caught up with Jodi Bulatao and her family, so they sought help from a credit counseling service.

A month later her situation got much worse: She lost her job of 13 years as an Aloha Airlines flight attendant. Not only was she unable to pay her debts, but she couldn't even make the recently arranged payments.

It's been a tough road for Bulatao and her family since the airline closed, laying off more than 1,900 people March 30.

Bulatao won't say how much she owes, but she said the problem started with purchasing furniture and they ended up "buying stuff we probably didn't need."

As their debt grew, the family charged basic necessities on credit cards.

"Many families have been using credit cards or taking out loans in order to keep up with their bills," said Scott Morishige, Community Clearinghouse project manager for Helping Hands Hawai'i. "However, as each month goes by, they are starting to find themselves in more debt."

It's a situation that no one should have to face alone, said Wendy Burkholder, executive director of Consumer Credit Counseling Service. People should not exhaust their savings, their college funds and 401(k)s to repay debt. Nor should they incur more debt to pay off debt, Burkholder said.

The Neighbors in Need fund was founded to help connect laid-off workers with credit counseling and other services that can help them restore equilibrium.

The Neighbors in Need fund, sponsored by The Honolulu Advertiser, KGMB9 and First Hawaiian Bank, raises money to help recently laid-off workers at Aloha and other companies pay the bills and buy gasoline, Morishige said.

JOBLESS RATE RISES

Hawai'i's unemployment rate last month rose to a four-year high of 3.5 percent, up from 3.3 percent in April, the Hawai'i Department of Labor and Industrial Relations reported.

The state expected the increase because of the recent closures of Aloha and ATA airlines and Moloka'i Ranch.

Hawai'i actually added 3,800 jobs in May from a year ago with the educational, health services and construction industries showing the most growth. Still, there were 23,450 people state-wide without jobs in May.

Burkholder has advice for those struggling with their finances.

"Make a budget with all the have-tos: the mortgage or rent, car payment, groceries, utilities and insurance. Then look at your overall financial picture," she said. "That will determine the next step. Communicate with the lenders immediately. I can't stress that enough."

Many credit-card companies are willing to work with people, she said, rather than sending out the bill collector. The average consumer seeking credit counseling carries about $23,000 on credit cards and other debt — that's $9,000 more on average than what credit counselors saw in 2004, Burkholder said.

"With every missed payment it's harder for the debt to be resolved," she said.

"You won't get out unscathed, but you will be able to mitigate the damage, still pay your debt and survive. You are not alone."

ROAD TO RECOVERY

Early this year, Bulatao and her husband sought help, closed accounts and put themselves on a payment plan. But then Aloha shut down and the bottom dropped out of their lives.

Bulatao's husband is still working and her parents let the couple and their teenage daughters, Robbi, 15, and Nikki, 14, live rent-free for now.

Her parents pay for much of the food, too, and the family was able to switch health insurance coverage from Aloha's plan to her husband's employer's plan.

"My husband's company has been so wonderful," Bulatao said. "I am so amazed that the community is stepping forward."

She spent time with her daughters and took pharmacy technology classes at night through WorkLinks, a job training program sponsored by the federal, state and city governments. So far, she hasn't been able to bring herself to apply for jobs with privately owned companies for fear they also would shut down.

"I want to work already," Bulatao said. "I'm still not sure what I want to do. But I'm hopeful we will recover."

On Monday, she starts working for the state, commuting by bus from Hawai'i Kai to town. The job is clerical, but she's happy to get the work though the salary as a temporary hire is a fraction of what she made as a flight attendant.

"I've been going through major grief," Bulatao said. "It's easier now. I'm not crying about it all the time. I felt like I wasn't contributing to the family."

While few Aloha employees have sought help from Burkholder's credit counseling service, business is up 26 percent from the same period last year. More than half of the people who seek credit counseling are over their heads because of overconfidence, overobligation or mismanagement of their finances, Burkholder said.

"There's no question when you have the bottom drop out, you need to triage to make sure the basic needs are met, that food, shelter and gas are taken care of so you can look for work," she said. "There's no cookie-cutter solution."