New York Consolidated Laws, Real Property Actions and Proceedings Law - RPA § 963. Payment of proceeds out of court where there are liens

1. Where the proceeds of a sale are paid into court, in a case specified in section 962, the party may apply to the court for an order directing that the money, or such part as he claims, be paid to him, and the court shall make such an order as justice requires.  The party shall by affidavit show the amount actually due on each incumbrance, and the name and residence of the owner of the incumbrance, as far as they are known or can be ascertained with due diligence, and showing service of a notice of the application on each owner of an incumbrance.  Service of the notice within the state shall be personal, or by leaving it at the owner's residence with some person of suitable age and discretion, at least fourteen days previous to the application.  Service without the state, if personal, shall be made at least twenty days previous to the application.  If the owner of the incumbrance resides without the state, and the place of his abode cannot be ascertained with reasonable diligence, notice may be served on him by publishing it in such newspaper or newspapers as the court may direct, once in each week for the four weeks immediately preceding the application.

2. When the whole amount of the unsatisfied liens upon an undivided share has been ascertained, the court shall order the portion of the money so paid into court on account of that share to be distributed among the creditors having the liens, according to the priority of each of them.  Where the incumbrancer is not a party to the action, the clerk or other officer by whom a lien is paid off shall procure satisfaction to be acknowledged or proved, as required by law, and shall cause the incumbrance to be duly satisfied or cancelled of record.  The expense of so doing shall be paid out of the portion of the money in court belonging to the party by whom the incumbrance was payable.