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What Exactly Happens to Us When We Die?First of all, we should understand that God deals with people in different ways throughout the ages. We sometimes call this dispensationalism; e.g., the Old Testament Jews had to sacrifice animals, but we don't. The death, burial, and resurrection of Christ brought about more changes than any other event.
First consider people in the Old Testament, before the first coming of Christ. Old Testament saints were saved on the same basis upon which we are saved today; i.e., by faith in God's grace through the death of Christ on the cross. Even though he hadn't yet died (God transcends time), you might say they were saved on credit. They had faith in what God had (progressively) revealed to them so far; i.e. that a Messiah would come. We, on the other hand, know Him by name because he came in our past.
Now, the Bible doesn't give us a lot of information on the logistics of heaven and Hell, but I'm comfortable that we can piece the doctrine together as follows: When Old Testament people died, their bodies went into a grave, but apparently, there was a temporary holding place for their souls. The Bible uses a term called hell, such as in Matthew 5:22, but the terminology is slightly different than what we normally use. Hell is the lake of fire where all unbelievers will spend eternity (Revelation 20:14-15). Apparently, however, the temporary holding place (sometimes called Sheol, or Purgatory) had a compartment for separate compartments for believers and unbelievers. (This is where the Catholics (mistakenly) built their doctrine of purgatory.) Unbelievers spent this period in the part called torments (Luke 16:23), while believers spent this time in a place called paradise (Luke 23:43).
However, with the resurrection of Jesus (the first resurrection), these Old Testament believers were transferred from paradise to Heaven. This is apparently what was going on in Matthew 7:53, which is a very difficult passage.
Now, for us, it's completely different. Since the resurrection of Christ has already occurred, and He has ascended to Heaven, when believers die today, our bodies go to a grave, and our spirits go straight to Heaven (2 Corinthians 5:1-8) to be with Christ.
When the rapture occurs (1 Corinthians 15:51-58, 1 Thessalonians 4:13-18), the bodies of believers who have died (members of the Church--Christ's body--unlike Old Testament believers) will be raised, and the bodies of Christians who are still alive will be transformed into glorified bodies. As a dispensationalist, I believe that the seven-year tribulation period will then ensue. Although I can't be definitive, it is probably during this time that we (all Christians) are judged by Christ at His Judgment Seat (2 Corinthians 5:10). Then, at the end of the Tribulation period, and the beginning of the Millennium, we will return to the earth with Christ to share in His 1000-year millennial reign (Revelation 19:1-20:6).
Finally, all unbelievers will be judged at the Great White Throne, and cast into the lake of fire forever (Revelation 20:11-15).
Owen Weber 2008