How do I change the default file permissions? Everytime I upload a new file to the server, it is set to 644. I want it to be 775 at least because there are others working on the same files.

It is in the ftp config which depends on the ftp server you are using.

What about 'umask' command? Cant he change the default file creation permission using this command?

The umask command will change the file permission on the entire server. This means that any new file created by any user on the system will have those permissions.