Purgatory: Does it exist?
The word Purgatory is based on the root word purge. The Catholic Church uses the term Purgatory to refer to the purging of our works which do not measure up to the standards of heavenly existence. It comes in part, but not completely, from the reference to the burning away of our works in 1 Cor 3:12-15
1 Cor 3:12-15 12 Now if any man build upon this foundation gold, silver, precious stones, wood, hay, stubble; 13 Every man's work shall be made manifest: for the day shall declare it, because it shall be revealed by fire; and the fire shall try every man's work of what sort it is. 14 If any man's work abide which he hath built thereupon, he shall receive a reward. 15 If any man's work shall be burned, he shall suffer loss: but he himself shall be saved; yet so as by fire.
Note that this is referring only to those who have accepted Christ, this is shown by the statement in verse 12 that these individuals built upon the foundation of Christ. These are Christians, those who are saved and have been determined as saved at the judgment. Next we see that there are different qualities of our works which we did on earth. Some are gold and silver making us vessels suitable for the masters use, and others are imperfect and will be revealed as unsatisfactory works and which will be burnt away when they are tried/tested. If we have any of our works survive, in other words if we properly accepted the free gift of salvation through works of loving obedience we shall receive a reward (crowns in heaven). If some of our works were of unsatisfactory nature they will be burnt away and we will suffer because of that loss. But we, ourselves will be saved, not because of our works, good or bad, but because we built upon the foundation of Jesus Christ.
The doctrine is not based on this one verse in isolation, and there are of course many related issues which indirectly support this doctrine; such as praying for the departed and the intercession of Saints etc. But this is the core point and I thought it best to begin here and get the definition of the concept out for all to see just what the RCC really teaches about Purgatory and not go off shooting at ideas that are misunderstandings of the doctrine.
Just so you don't have to take my word for what the RCC teaches (and not meant as a proof - just a verification of definition) here is what is in the official Catechism of the Catholic Church on the issue:
III. THE FINAL PURIFICATION, OR PURGATORY
1030 All who die in God's grace and friendship, but still imperfectly purified, are indeed assured of their eternal salvation; but after death they undergo purification, so as to achieve the holiness necessary to enter the joy of heaven.
1031 The Church gives the name Purgatory to this final purification of the elect, which is entirely different from the punishment of the damned. [Cf. Council of Florence (1439): DS 1304; Council of Trent (1563): DS 1820; (1547): 1580; see also Benedict XII, Benedictus Deus (1336): DS 1000] The Church formulated her doctrine of faith on Purgatory especially at the Councils of Florence and Trent. The tradition of the Church, by reference to certain texts of Scripture, speaks of a cleansing fire: [Cf. 1 Cor 3:15; 1 Pet 1:7] [954, 1472]
As for certain lesser faults, we must believe that, before the Final Judgment, there is a purifying fire. He who is truth says that whoever utters blasphemy against the Holy Spirit will be pardoned neither in this age nor in the age to come. From this sentence we understand that certain offenses can be forgiven in this age, but certain others in the age to come. [St. Gregory the Great, Dial. 4, 39: PL 77, 396; cf. Mt 12:31]
1032 This teaching is also based on the practice of prayer for the dead, already mentioned in Sacred Scripture: "Therefore Judas Maccabeus] made atonement for the dead, that they might be delivered from their sin." [2 Macc 12:46] From the beginning the Church has honored the memory of the dead and offered prayers in suffrage for them, above all the Eucharistic sacrifice, so that, thus purified, they may attain the beatific vision of God. [Cf. Council of Lyons II (1274): DS 856] The Church also commends almsgiving, indulgences, and works of penance undertaken on behalf of the dead: [958, 1371, 1479]
Let us help and commemorate them. If Job's sons were purified by their father's sacrifice, why would we doubt that our offerings for the dead bring them some consolation? Let us not hesitate to help those who have died and to offer our prayers for them. [St. John Chrysostom, Hom. in 1 Cor. 41, 5: PG 61, 361; cf. Job 1:5]