Hand Brake or Parking Brake?

Both terms are used interchangeably in the VW community. However, period correct VW manuals refer to the hand lever section as the "Hand Brake" and the mechanism in rear brake hubs as the "parking brake".
Normal Operation:
When the handbrake lever is pulled upward, the pawl engages with the stationary ratchet plate, holding the lever in place. The return spring keeps the pawl engaged until the release button is pressed. As the lever is raised, the left and right parking brake cables are tensioned. This action mechanically applies the rear brake shoes inside the brake drums, holding the vehicle stationary.
VW Hand Brake Parking Brake pop-out Animation
Over Extend Lever:
If the handbrake lever is pulled past its normal travel, the pawl can ride over or slip out of alignment with the ratchet plate. When this happens, the lever will not lock in place, and the parking brake will not hold the vehicle. Over-extension can also stress the return spring and linkage, leading to poor engagement. In most cases, you'll need to disassemble the hand brake lever to restore proper function.
VW Hand Brake Parking Brake Animation
Resetting a VW parking brake handle when the pawl has popped out is a common issue. Here's how you can fix it:

1. Tools You’ll Need:
• 10mm Wrench
• 10mm Deep well socket
• 1/4" Drive Ratchet
• Small flat blade screwdriver
2. Preparation:
• Ensure the vehicle is parked on a flat surface and the wheels are blocked for safety.
3. Adjust the Cables:
• Loosen the lock nuts on the parking brake cables beneath the handle using a 10mm wrench or socket. This will provide the slack necessary to work on the handle.
4. Remove the Handle:
• Pull back the brake boot to access the handle and its components.
• Remove the spring clip or snap ring from the pivot pin of the handle using a small flat blade screwdriver.
• Carefully pull out the pivot pin and then the handle itself.
5. Reset the Pawl:
• Examine "cat's paw" in the handle assembly. Rotate it, so the rounded edge is at top, and the teeth are at the bottom facing the ratchet mechanism.
• Gently adjust the pawl rod to reset it above the pawl correctly. You might need to manipulate the pawl and pushrod until they engage properly.
6. Reinstall the Handle:
• Slide the handle back into place. Ensure that the ratchet mechanism is set to a stationary position by notching into the chassis.
• Insert the lever pivot pin and secure it with the spring clip or snap ring.
• Pull the parking brake cables back to their original position through their ramps.
7. Tighten the Cables:
• Reinstall the equalizer bar, ensuring it seats correctly over the cable nuts.
• Tighten the lock nuts on the cables to the appropriate tension.
8. Test the Brake:
• Test the parking brake lever to ensure it engages and releases smoothly without overextending.