This is one of the most common problem for which we are receiving many support queries since the initial release of Directory.
If you are facing any relevant issue with the image upload process, here are few troubleshooting tips you can consider before asking for support.
1. First of all, Go to your Wp-admin >> Settings >> Submission Page >> Specify appropriate image size in kilobyte for the field that says “Maximum image upload size“
2. Now connect your ftp (https://templatic.com/docs/how-to-upload-and-edit-files-on-your-server-ftp-tutorial/) and go through the folder wp-content\themes\Directory\images\ and make sure that one of the sub-folder is already exist with the name as tmp (the directory should look look like wp-content\themes\Directory\images\tmp )
3. In case if the system has not auto-generated that folder during the directory activation process, try adding that folder manually with the same name and assign writable permission as 755 to it.
4. If the issue still persists, Try deactivating all your third party non templatic installed plugins.
I hope this will certainly gonna help you to resolve similar issues with the upload process.