The Apocrypha
Belief in prayers for the dead and the concept of some sort of purgatorial existence dates back to 2nd century BC Judaism. In the book of 2nd Maccabees it states, "For if he (Judas Maccabaeus) were not expecting that those who had fallen would rise again, it would have been superfluous and foolish to pray for the dead. But if he was looking to the splendid reward that is laid up for those who fall asleep in godliness, it was a holy and pious thought. Therefore, he made atonement for the dead, that they might be delivered from their sin" (2 Mac. 12:44-45).
The Catholic church depends heavily on this passage to justify its concept of Purgatory. What are we to make of it? First, we would call into question the cannonicity of the book. Second, the context of the passage is that of the final resurrection. So, just for the sake of argument,let's say I admit that 2 Maccabees is an inspired document and should be included as a part of sacred Scripture. This being the case, the text only speaks of the faith of Judas on the day of the resurrection, and not the intermediate state. Conclusion- this passage has nothing to do with Purgatory at all. The concept is not there.
The New Testament
One passage used to support Purgatory is Matthew 12:31-32. This is where Jesus refers to "the blasphemy of the Holy Spirit." He states that this sin will not be forgiven in "this age or the age to come." The argument is then made that since this passage refers to a sin that cannot be forgiven in "the age to come," the inference then, is that there are some sins that can be forgiven in "the age to come." This expression does denote the afterlife. The emphasis, however, falls on the afterlife, without any mention as to "when" in the afterlife. Also, if we consider both the Jewish doctrine of the day, and what Jesus taught elsewhere, sins not forgiven in this life or the world to come seems to refer to sins that are both punished here and in Gehenna. The text therefore teaches that the blasphemy of the Holy Spirit not only affects your life on earth, but also where you end up for eternity. Again, there is no concept of Purgatory in this text.
Another passage used to support Purgatory is Matthew 5:25-26. In this parable, Jesus basically says that anyone who does not forgive will be held in prison, and will not get out until he has paid the last penny. The inference is that the "prison" here refers to the afterlife, which means that one can exists in a state of "limbo" until all sins are dealt with. Paying the last penny here has nothing to do with paying for sins in the afterlife.
In Roman law, the plaintiff could go before the judge and bring the accused along with him. The defendant could however, settle the matter on any terms with the plaintiff as they proceeded to the tribunal. However once they reached the tribunal, no further attempts at reconciliation could be made; the issue would be settled according to law. Jesus is encouraging people to settle their differences before it reaches the judge.
The third and final passage we will look at is 1 Corinthians 3:10-15. In these verses Paul is discussing how each believer's work will be tested by fire to see if it is genuine. He states, "If any man's work shall be burned, he shall suffer loss; but he himself will be saved; yet as through fire." The inference is that a person goes through a purging fire, and thus they and their works are purified. This purifying is supposed to happen in the intermediate state. There is one huge flaw in this interpretation- in the context it refers to the Day of Judgement, not the intermediate state, "...for the Day will disclose it, because it will be revealed with fire." As most scholars point out, "the Day" is Paul's shorthand term for the final judgment.
Therefore based on what we have seen, there is no biblical basis for the concept of Purgatory. With this established, let's now go back to discussing those theological questions we mentioned at the beginning.
Are our souls sanctified immediately upon death, or must we go through a process like here on earth. etc.? I believe Scripture teaches that immediately after death, we are purged from all remaining sins as we enter the presence of the Lord. With that said, I also believe that in the presence of the Lord, we will be free from sin and pain, but still be able to progress in our walk with God. Hebrews 12:23 says that when we as believers come before God in worship, we also come to "the spirits of just men made perfect." The dead saints are presented as already being made perfect in the presence of God. Revelation 14:13 also indicates that those who die immediately enter into rest, "Blessed are the dead who die in the Lord from this point onward; yes, says the Spirit, that they may rest from their labors; for their works follow them." In Scripture, "rest" is not presented as inactivity, but as satisfaction in labor or joy in accomplishment. Revelation 7:14 confirms this as well, because the saints are "before the throne of God; and they serve him day and night in his temple." Based on these passages, the intermediate state seems to be the place where we are prepared for our habitation in the New Heavens and the New Earth.
Some may argue that since I believe as such, I really do believe in Purgatory. Not so. The view espoused above is held by many protestants, and is not like any form of Purgatory because:
1) Purgatory says we must continue to be cleansed from sin after death; the above view says that our souls are made perfect upon death.
2) Purgatory says that some sort of pain is involved with this sanctification process; the view above says that believers have entered into a state of rest.
3) Purgatory implies that their is a limit on how one experiences the presence of God; the view above says we dwell directly in God's presence upon death.
4) Some forms of Purgatory believe in punitive retribution for venial sins; nothing of the sort is in the above view. In fact, Christ has taken all punishment for us on the cross. Which is why, upon death, we are immediately made perfect and brought into Gods' presence.
5) Some forms of Purgatory say their is a "spiritual fire" we have to pass through; the above view does not adhere to this at all. The only mention of this type of fire is on the Day of Judgement, when our works shall be tested.
So, while I believe we will be very active in the afterlife, as well as continuing to grow in the Lord, I do not see a place in Scripture for the concept of Purgatory, no matter what nuanced view a person takes of it.