What happens if I ignore a collection agency's efforts to collect a small sum of money from me?

Like $500 from a towing company.

It will show up on your credit report (if it hasn't already) and they will take you to court to collect.

If it's a small sum - just pay it. It will be worth it in the long run.

If you continue to avoid them, and not make payments, they will eventually take you to court for it. Was it a check you'd written that bounced? If so, writing a hot check is a criminal charge. I had a check bounce in August that I didn't hear about because I got no mail for four months, which didn't allow me to pay it and the fee, and now I'm in criminal court for it. It really sucks. You should pay up now, and get it out of the way. Otherwise, you're setting yourself up for big trouble down the road.

they will destroy your credit

It will hit your credit report and have a negative impact on your credit going forward. They may, still, hound you and take you to small claims court. Then you loose twice.
If you are not paying for a good reason, you should dispute the charge and inform the credit bureau of the same, however, if you have no good reason for not paying - such as you owe the money legitimately, you should pay up for your own good.

they might sue you. or maybe not, considering the relatively small amount. but it will definitely stick on your credit report for 7 years or so--you don't want that. you never know where you might be in 7 years and you might want to buy a house or a car or something like that.
is this a valid debt? if so, did you think about trying to pay?...maybe they would make a deal with you?

They can start to bug you. Call your relatives and friends. Call your employer. It's not pleasant.

From a legal standpoint, they can ask a court to award them the right to take the money from your wages.

Collection agencies are willing to spend $1000 to get $500 from you, as evidence to their clients that they do what they need to do. They won't go away.

If you owe the money, they'll find a way to get it out of you.

If nothing else, your credit rating can be ruined. Not paying the $500 will cost you the inability to get a mortgage, a loan, or credit cards. Any cards you have: the interest rate can skyrocket.

Pay it.

nothing really you just end up having bad credit