[R'Chaim Vital z"l says] And it appears to me according to my understanding that I learned from my teacher z"l, that [the concept of karet haNefesh, and that one might think that there is no rectification of the soul with reincarnation after the three initial gilgulim (the three chances)] that there is no such a thing except with the Nefesh, since it is from the world of Asiyah which is sunk into the depth of the klipot.
So there is no mention in the Torah of "Karet" except for the Nefesh. This is because 'Karet' ("cutting off," literally refers only to) cutting off from Kedusha ("holiness"), [where the Nefesh] sinks into the klipot [which is the side of evil]. However, with the Ruach and the Neshama -- since they are from [the worlds of] Yetzirah and Beriah, where there is no strength or grasp by the Klipot (so there is no concept of 'Karet' with the Ruach and the Neshama). [I need a better translation here, but it is basically saying that even if the Nefesh falls into klipah, the Ruach and Neshama can still be rectified in the ordinary way, e.g., by joining onto the Nefesh of a Ger], and while this might take a long time, even multiple reincarnations, [it is still possible to rectify them].
And to further [explain] the difference between a Tzaddik and a Rasha, and to understand what we said (z"l) regarding Elisha Acher, [again, I need editing of the translation here] he didn't have in his hands a judgement (a 'din'), because he worked hard and engaged himself ('osek') in Torah study, etc. We learn from here, that when a Tzaddik studies Torah, and specifically if he is from one the Rishonim, there is no possible judgement on him that he enter into Gehinom (Gehinom has no rule over him).
Rather, he (goes through gilgulim) to clean up his sins so that he can enter into Gan Eden. Therefore, he has no directive other than Gilgul (reincarnation), and through this, each one of his sins that he might have which were not already atoned for through hardships during his life -- they are not purged through receiving punishment by entering Gehinom. But rather, he requires another gilgul (another reincarnation) until every one of his sins are rectified.
Therefore, he (the Tzaddik) can reincarnate through many gilgulim to atone for and to rectify his sins. This is not the case, however, for a Rasha. He is required to enter into Gehinom to clean up all of his sins once, and after that, he is not required (or given the opportunity) to return in many gilgulim. [The logic here is that a Tzaddik can go through many gilgulim to rectify each and every part of his soul.
However, a Rasha is given the 'easy route,' which is a purge of his sins in Gehinom. The logic is that if he were given additional lifetimes, he might continue to sin. Thus, a Rasha (as we will explain in the next section) is not given the opportunity to reincarnate many times like a Tzaddik can.]