Question: Where do our souls go when we die?

What happens to the soul of the unbeliever versus the soul of the believer in Christ—when they die?

(Note: This question was received from an inmate in prison after I had sent him a few good books. He mentioned Ecclesiastes 3:21 and 12:7 along with the question and had some extra confusion based off of those two Scriptures.) 

You mentioned Ecclesiastes 3:21 and 12:7 along with your question. The book of Ecclesiastes does have a lot of help for us as the word of God but is purposefully limited to all things “under the Sun.” So in the depression of the realization of everything being “vanity” we’re not going to get any clear picture of how things work in the unseen universe especially. He even says “Who knows if …?” So we’re not receiving much teaching on Hades from Ecclesiastes. It will add confusion to the issue, and it is supposed to. You are supposed to realize that everything "under the Sun" is vanity when you read Ecclesiastes. The end realization and point is found at the very end of that book. 

We could grab some basic understanding from Jesus’ comments on this in Luke 16. The story of the rich man and Lazarus includes them both dying. The rich man is in Hades and Lazarus was carried to Abraham’s bosom or side. There is a chasm between these two but there is a lot of similarities too in that these are the places of the dead. Paradise is a taste of heaven, while Hades is a taste of hell.

You mentioned that Sheol and Hades are the same place—true. Sheol is simply the Hebrew word for the Greek word Hades. Something to also know is that sometimes Hades is in reference to the whole realm of the dead, and other times it is very specific to an area for unbelievers. This is similar to how we have New York state and New York City. And we can say “New York, NY” while realizing the difference. In the Bible, we could say that the rich man is at Hades, Hades. In the general place of the dead (Hades), there is a chasm between two sections. One section is Hades, Hades and the other section may be called Paradise or Abraham’s bosom. Jesus told the thief on the cross that believed that he would be with Him that day in Paradise. They both died and went to Hades. The section in Hades they went to is called Paradise.  

When Peter preached at Pentecost in Acts 2 he quoted David “thou wilt not leave my soul in hades,” when talking about Jesus (v. 27). He explained how David was not talking about himself since his tomb was nearby and he was still in Hades (v. 29). But David spoke, “concerning the resurrection of the Christ, that neither has he been left in hades” (v. 31). So you can see here that Christ went to Hades but rose from the place of the dead (Hades). And you can see that David (definitely a believer) was still in Hades. In this instance, Hades is used in a general way for the overall place of the dead. Whereas in Luke 16 it is used in a specific section of Hades.

The believers in Paradise will be raised from the dead when the Lord returns (see 1 Thess. 4:13-18). The unbelievers in Hades will be judged at the Great White Throne judgment after the millennial kingdom (see Revelation 20). 

Eventually, after the resurrection with new bodies and the Kingdom Age is finished, all believers will live forever with the Lord in the New Jerusalem—Heaven.