From Yahoo answers:
* When we die, our souls are cleansed of any wrongdoings. This is done by our accounting of every action done in life. It's believed that this process takes no longer than 12 months but most people don't do enough bad in life to warrant it taking a full 12 months.
* Our souls return to HaShem to wait for the world to come.
* Our souls may be reincarnated into different people so that we have additional chances to work to become closer to HaShem.
* Those souls that choose to be truly evil in life, cannot survive the process of cleansing and cease to exist.
The above is not promoted by Biblical Judaism. The idea of "soul" is taken from Gen. 2:7. When HaShem formed man from the dust of the earth, He breathed into his nostrils the breath of life and man became a living soul. To become is to be, not to have. Therefore, we do not have souls; we are souls. It means that "soul" is only the combination of the breath of life with the body. When we die, the breath of life goes back to God Who gave it and the body goes back to the dust where it came from. That's when the combination is undone and the soul becomes non-existent. When we die, therefore, we cease to exist even for God Himself Who is the God of the living and not of the dead. (Mark 12:27; Psalm 88:5)
Our souls do not return to HaShem to wait for the world to come. Soul=person. Therefore, both are one and the same and there is no such a thing as a return of souls to HaShem after death as they are all already in the world-to-come which is the grave; the world wherefrom no one will ever return. (Isa. 26:14; II Sam. 12:23; Job 10:21)
There is no such a thing as "reincarnation" in Biblical Judaism. This is the only life we have to live. There is no other. So, we better live it the best way we can. Last but not least, all souls aka persons, righteous or unrighteous, are under the process of cleansing but only while they live. Once they cease to exist, they are all gone.