I would first determine if the binder bolt is bent, if it is i would just buy a new brakeset if you like the bike and save yourself the trouble. In the one pic showing the back by the spring it appears to have been bent as the spring curl should not touch. fix that first and the pad will start to come around. you will have to take it apart to do this. a dead blow or brass hammer will not dent or damage the arm. reassemble and fine tune the arm around the pad area using a cresent wrench or two to finish.
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Painkiller is right, the left arm (left when you're on the bike) of the caliper is bent back slightly. You can do one of a few things here.
- Take the caliper apart and bend that arm back straight.
- Leave it bent but bend the tab that holds the brake pad so it is parallel to the rim.
- Replace the whole caliper
In general, this type of brake is pretty tuff and you can bend them around some without a problem. But there's always a risk something was stressed too far and the whole thing could snap. There's no way we can tell you for sure. So safest is to replace, but unless I saw some other evidence of damage, I would bend the arm back into place.
Note that if the brakes squeal a lot, try bending the pad flange so that the front of the pad hits the rims a mm or 2 before the back of the pad. That usually gets rid of brake squeal.
First, I tried to bend it back while attached to the bike. After that, I took the brake assembly apart, took the caliper arm down to the side walk outside, and hit it with a hammer for several minutes. Failing that, I put the brake assembly back together and had another idea. I took the break pad off and put a large, sturdy, screwdriver in the opening and gave it a hard twist. Finally it bent back into place! Amazing what a little leverage can do. I could have saved myself a lot of trouble had I just done that from the very beginning. On the bright side, I now have an excellent understanding of how caliper brakes work. Now I can replace the disintegrating brake pads without worrying about the brakes not connecting with the rims correctly. Thanks for all the advice!