The error: "fatal: unable to create thread: Resource temporarily unavailable" strongly suggests you've run out of memory on the server, which can happen if you have a repository with lots of large files, which can cause re-packing to take a lot of memory, or limited virtual memory - either in general, or just for that account due to the ulimit setting.
Anyways, here's the commands you can run to limit the amount of memory that packing may take by logging into the remote system (as the user that git runs as) and typing these commands:
git config --global pack.windowMemory "100m"
git config --global pack.packSizeLimit "100m"
git config --global pack.threads "1"
Hope this works.
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