There is disclosed, for use in a CDMA wireless network, a channel resource allocator for reallocating a data traffic channel in a soft handoff state to handle incoming calls from new mobile stations. The channel resource allocator includes an overhead channel controller for reconfiguring a data traffic channel as an overhead channel upon failure of an overhead channel element in a base transceiver station (BTS). The channel resource allocator determines if all data traffic channels of the BTS are in use. If so, the channel resource allocator determines whether any of the existing calls being serviced by the data traffic channels are in a soft handoff state in which the call is connected simultaneously to two or more base transceiver stations. If so, the channel resource allocator drops the connection to the BTS in which the overhead channel failure occurred, thereby freeing up the data traffic channel. The overhead channel controller may then reconfigure the dropped data traffic channel as an overhead channel, or the channel resource allocator may reallocate the dropped data traffic channel to handle a new incoming call from a mobile station.