I received a hack threat on my iPhone, how can I fix this?

I received a threatening email that included the last 4 digits of my phone number stating that my phone has been hacked and they know everything about me. I have one day to pay the amount requested or all of my

personal information including photos and videos on my phone will be exposed. Is this real? What can I do to fix this? Please help!

[Re-Titled by Moderator]