Here is a good explanation:
Where did Old Testament believers go when they died?
Question: "Where did Old Testament believers go when they died?"
Answer: The Old Testament teaches life after death, and that all people went to a place of conscious existence called Sheol. The wicked were there (Psalm 9:17; 31:17; 49:14; Isaiah 5:14), and so were the righteous (Genesis 37:35; Job 14:13; Psalm 6:5;16:10; 88:3; Isaiah 38:10).
The New Testament equivalent of Sheol is Hades. Prior to Christ’s resurrection, Luke 16:19-31 shows Hades to be divided into two realms: a place of comfort where Lazarus was (heaven) and a place of torment where the rich man was (hell). Lazarus’s place of comfort is elsewhere called Paradise (Luke 23:43). The rich man’s place of torment is called Gehenna in Mark 9:45. Between Paradise and Gehenna (the two districts of Hades) there was “a great gulf fixed” (Luke 16:26).
Jesus is described as having descended into Hades after His death (Acts 2:27, 31; cf. Ephesians 4:9). At the resurrection of Jesus Christ, it seems that the believers in Hades (i.e., the occupants of Paradise) were moved to another location. Now, Paradise is above rather than below (2 Corinthians 12:2-4).
Today, when a believer dies, he is “present with the Lord” (2 Corinthians 5:6-9). When an unbeliever dies, he follows the Old Testament unbelievers to the torment side of Hades. At the final judgment, Hades will be emptied before the Great White Throne, where its occupants will be judged prior to entering the lake of fire (Revelation 20:13-15).
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Where did Old Testament believers go when they died?