Within the Christian faith, there is a significant amount of confusion in regards to what happens after death. Some hold that after death, everyone “sleeps” until the final judgment, after which everyone will be sent to Heaven or Hell. Others believe that immediately after the moment of death, people are instantly judged and send to their eternal destinations. Still others claim that when people die, their souls/spirits are sent to a “temporary” Heaven or Hell, to await the final resurrection, the final judgment, and then the finality of their eternal destination. So, what exactly does the Bible say happens after death?
First, for the believer in Jesus Christ, the Bible tells us that after death, believers’ souls/spirits are taken to Heaven, because their sins were forgiven from having received Christ as Savior (John 3:16,18,36). For believers, after death is to be “away from the body and at home with the Lord” (2 Corinthians 5:6-8; Philippians 1:23). However, passages such as 1 Corinthians 15:50-54 and 1 Thessalonians 4:13-17 describe believers being resurrected and given glorified bodies. If believers go to be with Christ immediately after death, what is the purpose of this resurrection? It seems that while the souls/spirits of believers go to be with Christ immediately after death, the physical body remains in the grave “sleeping.” At the resurrection of believers, the physical body is resurrected, glorified and perfected, and then reunited with the soul-spirit. This reunited and glorified body-soul-spirit will be the inhabitance of believers for eternity, in the New Heavens and New Earth (Revelation chapters 21-22).
Second, for those who do not receive Jesus Christ as Savior, after death means everlasting punishment. However, similar to the destiny of believers, unbelievers also seem to be sent immediately to a temporary holding place, to await their final resurrection, judgment, and eternal destiny. Luke 16:22-23 describes a rich man being tormented immediately after death. Revelation 20:11-15 describes all the unbelieving dead being resurrected, judged at the Great White Throne, and then being cast into the lake of fire. Unbelievers, then, are not sent to Hell (the lake of fire) immediately after death, but rather are in a temporary realm of judgment and condemnation. However, even though unbelievers are not instantly sent to the lake of fire, their immediate fate after death is not a pleasant one. The rich man cried out, “I am in agony in this fire” (Luke 16:24).
Therefore, after death, for both believers and unbelievers, a person resides in a “temporary” Heaven or Hell. After this temporary realm, at their final resurrection, peoples’ eternal destiny will not change. The precise “location” of that eternal destiny is what changes. After death, believers will ultimately be granted entrance into the New Heavens and New Earth (Revelation 21:1). After death, unbelievers will ultimately be sent to the lake of fire (Revelation 20:11-15). These are the final, eternal destinations of all people – based entirely on whether or not they had trusted Jesus Christ alone for salvation (Matthew 25:46; John 3:36).
**Courtesy of Questions.org
SoLo Lives! Ministry 
December 13, 2009 at 8:26 pm
I might also point out, that believers at the time of death go to be in the presence of the Lord:
“We live by faith, not by sight. We are confident, I say, and would prefer to be away from the body and at home with the Lord. So we make it our goal to please him, whether we are at home in the body or away from it.”
Also, if you look at Rev.6:9-11 you will see the destination of those who die in the Lord.
When he opened the fifth seal, I saw under the altar the souls of those who had been slain because of the word of God and the testimony they had maintained. They called out in a loud voice, “How long, Sovereign Lord, holy and true, until you judge the inhabitants of the earth and avenge our blood?” Then each of them was given a white robe, and they were told to wait a little longer, until the number of their fellow servants and brothers who were to be killed as they had been was completed.
Since it is stated that they are under the altar, this puts their location as being in heaven and waiting for their resurrection.