Question about putting insulation around knob and tubing wire.

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I just ripped the old drywall off a room in my house and am putting insulation in before adding new drywall.

There is old knob and tubing wiring coming down between two of the studs to an outlet. The wiring is sort of in the middle between the outer part and the inner part of the studs of the wall so I would have to peel my insulation apart and put some behind the wiring and some in front of the wiring otherwise it won't fit.
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Is it OK to sandwich this old wiring like this with insulation?
 
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Rewire the entire room while you have it open. Get rid of the K&T. You can NOT bury it in insulation.
 
Joe is right as you have it open and is time to do some wiring.

Rewire the entire room while you have it open. Get rid of the K&T. You can NOT bury it in insulation.
I was going to insulate for now and not dry wall till I rewire because of the cold but I suppose, I'll insulate everything except for where the wire is and then rewire before I drywall.

Thanks for letting me know guys. :)
 
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