I've spend too much money this christmas and i cant service the debt

I think the first thing you need to do is cut up all your credit cards as this will stop you getting further into debt. Having credit available is great however if you spend impulsively then its a surefire way to get into financial trouble.

Once you've cut your credit cards you need to make a list of all the credit cards and the debt that you owe on each card. Make a note of the minimum payment needed to service the debt. Your aim is to pay as much as you can over the minimum payment so you can clear the debt quickly.

Once you know how much you have to pay you need to create a detailed income and expenses statement. You need to list all your income after tax as well as all your expenditure and then see if you have any surplus. If you don't have any surplus you need to find ways to lower your expenses. See if you can cut back on non-essential items to create a budget surplus.

Now that you've created a surplus you need to see if this will cover your credit card payments over the minimum payments. If you have more than the minimum payments start paying off your credit card debt as normal. If you cannot cover the minimum payment you need to contact your creditors and let them know of your circumstances.

Having a surplus income less than the credit card minimum monthly payments means you cannot afford the debt and you need to let the creditors know. Call each creditor and explain to them that you are finding it difficult to service your debt. Offer your creditors a copy of your income and expenditure forms and a list of all your debts so you can prove your financial circumstances. You should also make a formal request for the creditors to stop all interest otherwise there is a risk that everything will spiral out of control. You should also make a formal request to the creditors to lower their minimum payments so you can clear the debt without missing any payments.

Unfortunately your credit score will take a hit but as long as you make smaller payments on a monthly basis it will be better than not making any payments at all.

You should now have an understanding between yourself and the creditors on clearing the debt. Your aim now should be to improve your financial circumstances and this includes continually lowering your expenses and increasing your income. You should consider the following to lower your expenses

1. Cancel all Cable Subscriptions
2. Sell your vehicle
3. Move to a smaller house
4. Reduce your grocery shop by 50%
5. Stop all spending on non essential items

You should also look at ways to increase your income, this could involve the following

1. Asking for a payrise
2. Looking for a better paid job
3. Looking for a second job
4. Sell all excess clutter on eBay
5. Think about starting a side business to top up income

Your aim should always be to reduce expenses and increase income so you have a surplus big enough to pay off your debt quickly. Once you've paid off your debt you should consider creating an emergency fund which consists of 3 months of expenses. Having an emergency fund means you don't have to get into debt and you can use the money you've put away for a rainy day just in case you need it.

After establishing your emergency fund you should consider investing your money so it works to create another source of income. Assets you should consider include property for rent, stocks for dividends and businesses for profits. Your ultimate aim would be to accumulate enough assets and receive enough income so you don't have to work again. This plan if taken seriously should work and you should see results within 6 months. You should use your time wisely and increase your Financial Intelligence by reading personal finance books to change the way you think about money. I hope the advice has been helpful and please ask any follow up question if you need clarification.