An error occurred in the upload. Please try again later. BUT only with my theme

This error only occurs when using my own custom theme that I’m attempting to create from scratch. When using the default theme everything works.

When using my custom theme and trying to add an image to post either within the post or as a featured image the media library loading icon will run continuously and nothing shows up. When trying to upload a file – I get the error.

I installed wordpress using the instructions here https://www.digitalocean.com/community/tutorials/how-to-install-wordpress-with-lamp-on-ubuntu-16-04 so all permissions are set as instructed. I find it difficult to believe it is a permission issue when everything works fine with the default theme – which is a very nice theme but I’m trying to learn how to create my own.

So, can anyone tell me how to fix this?