Real Madrid has been chasing De Gea all summer, but with five days of the transfer window left, the goalkeeper remains at Old Trafford.
United insists it will not sell De Gea to Madrid unless it receives a fee of over $70 million for the 24-year-old, who has just one year left on his contract.
The Spaniard has not played for United this season because he has lost focus due to Madrid's interest in him, according to manager Louis van Gaal.
And Schmeichel admits the situation is far from ideal.
"I'm very thankful for what he has done for Manchester United and I would not hold anything against him if he moves on, but I want the situation resolved because it's an absolute joke that it has carried on into the season," the former United goalkeeper told the BBC.
"A club like Manchester United, being in a transition period, needed to be ready for the season with every issue resolved and not having two or three still hanging out there but hopefully it gets resolved now.
"I would love David de Gea to commit to Manchester United and sign a new five-year contract. He has been absolutely outstanding in the last two seasons.
"But I also understand when Real Madrid - who are from his home town - when they come calling, of course you want to go back there.
"I want to know - is he with us or someone else? And if he is with someone else I want the manager to have the opportunity to go out and buy another goalkeeper."
