Degeneracy pressure has to do with the energy a particle has, and the size it can be constrained to.
Pressure is highest in the center, so that will be the point of collapse (into a smaller degeneracy mode, such as white dwarf --> neutron, or neutron --> [possible exotic forms] --> final black hole).
There could be local disturbances (star quakes; collisions; perhaps nuclear reactions triggered by higher density?) which create pressure waves that trigger this behavior, but it's still likely to happen in the center (or at least on the rotational axis, where there's no centrifugal force to reduce pressure).
Anyway, the physical explanation is that, as a given particle is confined to a smaller and smaller space, its energy (and therefore temperature) doesn't track proportionally, due to relativity. So as size approaches zero, energy remains finite. The curve of size(white dwarf) vs. mass generally goes down, but it goes down hyperbolically as you approach the Chandrasekhar limit, at which point the assumed physics (degenerate electrons) break down and, at some point down that curve, other interesting things happen (i.e., reverse neutron decay).
Obviously, as the degeneracy breakdown process is going on, volume is decreasing and density is increasing, which increases the probability of conversion. This would begin as a small background rate, for example in high density dwarfs, there would be a gradual enrichening of neutrons. Which might be confirmed through x-ray spectra emitted or reflected from the star's surface corresponding to neutron-rich elements; but, it would be a slow process, so it wouldn't really be something that can be observed over scientifically useful time scales (Gyr?).
If mass is being added to drive the star closer to the threshold (i.e., it's still accreting), neutron production probably wouldn't be visible on top of the infalling matter (and probable fusion reactions, including novae..). So in this case, it would just gradually shrink, until one day, poof, in a big explosion, it becomes a neutron star (or whatever).
The reverse-neutron decay process is endothermic (indeed, the conversion of an entire star's worth of electrons into neutrinos is a large fraction of the total energy output of this type of supernova!), but there will be a lot of fusion going on as the increasing density pulls hydrogen (including newish deuterium and tritium), helium and more together.
Note that a black hole is not degenerate matter; in a pragmatic sense (i.e., in terms of anything that can be observed externally), it isn't made of matter at all, it's just a very massive hole in space-time. A property of space-time curvature, corresponding to a sufficiently dense mass charge, but with no identity such as particle resonances or stuff like that, only the most basic bulk properties of electric charge, spin (mechanical charge; a consequence of the symmetries of 3D space) and mass (space-time charge).
The mass within may still be due to baryonic matter-as-we-know-it (and energy), but it falls towards a singularity, and can never communicate with the outside-world-as-we-know-it, because all causal lines (geodesics) spiral inward. Clearly, such matter is getting very close together, implying special quantum physics (ever smaller distance scale, ever larger energy scale), but we don't have any present theories on what happens under such conditions.
Tim