I have just finished the Cyberseams tote bag, also knitted in the flat. Here is the link to its pattern for the handle and it includes instructions and a video for attaching the handles
Basically, one end of the handle is knitted in st st as part of the bag and attached at the other end using a crochet hook (the video shows how).
I have also made another flat bag and used I-cord. My experience is that the stocking stitch is much stretchier than the I-cord
Good luck and let us know how you get on.