Kathy returns in October 2007, and finds Ste Hay (Kieron Richardson) living with Amy. Kathy and Mike are not happy and throw Ste out. Amy then leaves with Leah and moves in with Ste. Kathy phones the social services which excludes her from her daughter even more. Kathy discovers Sarah and Rhys are back together. Their relationship leads to the start of Kathy's vendetta against the Ashworth family. The family begins getting strange phone calls, vandalism on their house and even a Tupperware box full of faeces. The Ashworths begin to accuse several people including Ste and even own family members Hannah Ashworth (Emma Rigby) and Beth Clement (Sinéad Moynihan). Whilst throwing a brick through the window of the Ashworth family business, Drive 'n' Buy, Kathy loses a nail. She goes to Evissa for a manicure and tells Carmel Valentine (Gemma Merna) that she took the nail off after it became loose. Carmel turns detective and finds a broken nail outside Drive 'n' Buy. She then reveals Kathy as the vandal. Kathy, Mike, Sarah, Amy and Ste are confronted by Rhys, Hannah, Beth. Suzanne (Suzanne Hall), Neville (Jim Millea), and Josh (Sonny Flood). Kathy also gets jealous of Zoe Carpenter (Zoë Lister) and falsely accuses her and Mike of cheating. Although he had always previously supported Kathy throughout all of her various issues while at Hollyoaks, this accusation, coupled with Kathy's vendetta against the Ashworths, finally proves to be the last straw for Mike. Unable to cope with Kathy's behaviour any longer Mike tells her to leave. When she refuses, Mike throws her out, and Kathy goes to stay with her mother. In January 2008 Mike subsequently files for a divorce.